Congressman Mike Thompson with SSU students discussing student loan crisis. (Left) Kia Kolderup-Lane, and (right) Alex Boyar, outgoing Associated Students president, and Christian George. (Photo by Alex Hallmark.)
"Terror is what students are feeling," said outgoing Associated Students president Alex Boyar to Congressman Mike Thompson as he spoke about the student loan crisis with seven other SSU students last week.
Thompson came to campus to hear from SSU students so he could reflect their realities at the Congressional hearings which began Tuesday (May 8) on the expiration of an interest rate reduction included in the 2007 College Cost Reduction and Access Act.
Commonly known as the Stafford loans or Federal Direct Loan, the current rate of 3.4% expires on July 1, 2012 and without intervention will double to 6.8%. Congress has only two months to take care of a problem that affects more than 7.4 million students across the country.
In more than an hour of conversation in the Sue Jameson room in Stevenson Hall, Thompson came away with a sobering picture of how high levels of student loan debt will impact students and their families in the future.
Angelina Richter described her single mom who would be homeless if she lost her job and can't even consider sending her sister to college.
Anthony Gallino's parents took out a $17,000 loan and he says he is always worrying about their finances and the impact on their lives as he makes his way through college.
He is also very concerned that he will become disenfranchised by not being able to take a job in political science for which he is studying.
"Life is not going as we were promised," he said. "It is not the same as our parent's experience."
Katy Havens says she is baffled by the lack of support for education in the nation. "How are we going to create a good workforce without one?" She wants to go to graduate school but the thought of "taking out a loan I can't afford to pay off is terrifying."
Kia Kolderup-Lane developed a 50-page thesis for her political science degree on why education improves conditions in a society. "Everything progresses with an education. It must be a priority," she says. Even though she has a six-month grace period before payments on her Stafford loans come due, Kia faces having to make payments for her private student loan immediately after graduation and even before she has a job.
Boyar says the attacks on education funding made to low- and middle-income students are ultimately separating the classes by cutting out the middle class. "The working family takes the biggest hit," he says.
"This is blocking our ability to consume and contribute to the economy," he said about the relentless cuts to education. "We are a giant generation and they are blocking our access to goods and services."
One student said that those with loans to pay off will not be able to buy houses or cars for a very long time. Another said her parents would be dead before the loan they took out for her education is paid off.
The fact that some former college students have social security benefits or wages garnished to pay off loans reveals the long term effects of the crisis, one student said.
Another pointed out that President Obama and his wife only just paid off their own student loans a few years ago.
Student loan debt ($867 billion) now tops U.S. credit card debt ($704 billion) according to the Federal Reserve Bank of New York in a report on Planet Money. At http://www.npr.org/blogs/money/2012/04/18/150909686/what-america-owes-in-student-loans.
Many US officials say America faces the very real possibility of another major economic collapse like the devastating home mortgage crisis.
Even Thompson had first hand knowledge of the crisis, having polled his own staff for their experience. One member had a six- figure loan to pay off. "It hampers everything you try to do in the future," she told him.
With three to four tuition hikes in the recent past, classes cut back, job prospects dim, one student asked "Are we educating an entire generation to live in their parents' basement?"
For current news on the issues involved at the Congressional hearings on extending the loan rates visit http://news.yahoo.com/divided-congress-likely-agree-student-loans-183250736--business.html.