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| Photo by Valeria Sistrunk |
When President
Obama proposed his 2013 budget, he also included a big change to student
loans. The president’s administration
plans to change the interest rate on student loans each year based on the
government’s borrowing costs.
Patricia Hudson,
a Spelman alumna, says she’s been paying off her student loans for almost 10
years now. “I’ve been paying off my student loans, I would say, faithfully
since 2002 or 2003,” said Hudson.
Officials say,
because of people like Hudson Obama wants interest rates on federal loans to
adjust to reflect today’s low-interest-rate environment.
But what if the
economy were to pick back up? Of course, interest rates would rise along with
it, which is why consumer groups disagree with Obama’s plan. They criticize the
proposed change for not having a cap on the amount of increase.
“It’s not a very
progressive way of trying to deal with a situation that’s been out of control
for 20, 30 years, which should be completely revamped in the first place,” said
Hudson.
Because of the
possibility of loan interest rates increasing, critics predict students might
search for other options to pay for school.
Nikkita King, a
senior criminal justice major at Florida A&M, says she doesn’t like the new
bill and if passed, “It would really discourage me from getting loans…there are
a lot of scholarships and grants out there, and I think that would probably be
the best way to go.”
If President
Obama’s proposal doesn’t go through, the rates on subsidized loans are set to
double to 6.8 percent this summer.
