US House Passes Student Loan Bill

With student debt at an all time high, a new bill will avoid making a bad situation too much worseThe US House has just passed a bill by 221 votes to 198 that will reverse a plan to increase the interest rate on student loans by up to 100%.

The interest rate on Stafford loans – which are┬ásubsidized and available for students who have a low income – were due to double this July from the current 3.4% to 6.8%. The new bill will also influence the percentage rates for those with unsubsidized Stafford loans and Plus loans.

The level of student loans that have become overdue has never been higher, with many students struggling to find employment after graduating and falling deeper and deeper into debt. In fact, student loans have become one of the biggest forms of personal debt in the country, second only to mortgages.

The figures reflect the reality of these desperate times for students: over 10% of their loans are beyond ninety days overdue – which is classed as seriously delinquent – well up from the 6% of ten years back.

Despite the debate about whether US education is over-priced, the fact remains that almost 90% of recent college graduates have currently found employment while those with just a high school diploma fare considerably worse, with just under two-thirds employed.

While the situation is still rather bleak, it appears this bill will avoid compounding the current misery for many students too far. More about how this will affect you over at bloomberg.com.

Philip

6 Comments

  1. Honestly, I just can’t comprehend the reasoning behind those in Congress who voted against this bill and wanted to see interest rates increase. We should see MORE government oversight in our education, not less. We bellyache about our workforce being less educated and skilled than those in other countries and we lament the fact our jobs are being shipped overseas yet we have leaders who want to make educating students MORE difficult and expensive. (walks away, shaking head.)

  2. I can’t believe we have elected leaders who want to burden young voters even more. To that I say, good luck in 2014. We won’t forget.

  3. I think that more has to be done to the American education system than just control the interest rates of student aid. I’m not sure how much is actually in the power of the government to change, but there is no reason that the private colleges here charge 60 and 80k a year to attend! Even state schools are grossly overpriced, especially compared with the job salaries offered to graduates. There’s simply no way to go through the higher education system here without mounting up what will for most people be a lifetime of debt.

  4. It really is troubling how much it costs for a young student to get an education, regardless of financial aid and loans. Especially since it is still difficult enough to get a good job after school, and salaries are often not even competitive enough to make schooling worth it.

  5. I am horrified by these numbers, I have 2 kids at home and, of course, I would love to help them get a college education. But how do you keep up with these high costs? Also, after graduation, with the recession affecting everyone all over the world, how are you guaranteed a job to be able to pay the money back? The times we live in now….

    • Agreed. I think part of the problem – as far as not being able to find work – is people are getting qualified in fields where either there isn’t a lot of demand, or else there is too much competition for the available jobs. But the last thing we need is the young dropping out of further education.

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