5/16/12

Corinne Lestch

http://www.nydailynews.com/new-york/education/sen-gillibrand-pressures-congress-prevent-college-loan-hikes-affect-thousands-city-students-article-1.1078755?localLinksEnabled=false

College loan interest rates will soar, affecting thousands of students citywide, if Congress doesn’t act immediately, according to a new report released by the Center for American Progress.

About 420,000 college students in New York State will have to pay more than $340 million extra in interest if the rates on Stafford loans double from 3.4% to 6.8%, according to the report.

“We could have prevented this from doubling,” charged Sen. Kirsten Gillibrand (D-N.Y.) on a conference call with reporters on Tuesday. “When we price our young people out of higher education, we all pay the price. We rob ourselves of a future engineer or biologist or teacher.”

Jillian Sesenton, a master’s student at Fordham University, said she will be close to $200,000 in debt once she finishes her thesis this year, between her undergraduate and graduate programs. She started college at 28 after scraping up money from odd jobs.

“I’m excited to graduate, but I know what’s waiting for me in the end,” said Sesenton, now 38. According to the report, the median student borrower age went from 35 in 2007 to 39 in 2009.

“I have no idea how I’m going to manage to pay these loans,” continued Sesenton, who grew up in the Patterson Houses in Mott Haven. “If they double the interest rates to 6.8%, I’m going to be completely broke. I don’t know how I’m going to survive.”

Congress established the low interest rates in 2007 over a period of five years. The bill to keep the existing rate for another year was blocked by Republicans in the Senate, making the issue another instrument for partisan bickering.

Students at the city and state universities of New York may face more hikes on top of the federal loan threat after a tuition increase goes into effect.

“Especially with the tuition increases we’re seeing at SUNY and CUNY, and the interest rates we’re seeing on top of that, is really a double whammy for students,” said Karen Scharff, executive director of Citizen Action of New York.

Starting next fall, all CUNY students will pay $300 extra annually for five years, bringing the in-state tuition to $6,330 a year after a five-year hike.

“Let’s keep (college) affordable,” pressed Gillibrand. “There’s no excuse for inaction. There’s real concern on how to move forward here.”

5/15/12

Jillian Jorgenson

http://www.silive.com/news/index.ssf/2012/05/staten_island_college_students.html

Nationwide, student loan debt has topped $1 trillion – and if Congress doesn’t act soon, New Yorkers heading to college in September can expect to pay about $420 million more interest on their federal loans.

If Congress doesn’t act by July 1, a law setting the interest rate on federal subsidized Stafford loans at 3.4 percent will expire – and the rate will double, to 6.8 percent. The rate hike would affect more than 7.4 million Americans who use the popular loans, which are issued to students at both public and private universities.

The 3.4 percent interest rate is for subsidized Stafford loans, given to needier students. Many other students already pay 6.8 percent in interest for unsubsidized  Stafford loans.

According to a report from the Public Policy and Education Fund of New York, USAction Education Fund, and Campus Progress released today, 422,670 New York students have currently borrowed funds through unsubsidized Stafford student loans. By keeping the interest rate where it is now, those New York students would save $419,711,310 – an average of $933 per student.

In a conference call with advocates working to keep the rates low, Sen. Kirsten Gillibrand said she would continue to fight on behalf of students. Last week, she said, the Senate had the chance to “do the right thing” and extend the 3.4 percent interest rate for a year.

“Instead, my colleagues across the aisle chose to stand in the way of this common sense proposal,” she said.

The higher interest rates will push “access to quality higher education even farther out of reach” for many, and will lead to young people finishing college with “even more unmanageable debt.”

Sen. Gillibrand said while both parties were open to cutting the interest rates, they couldn’t agree on how to pay for it. Democrats proposed closing tax loopholes, she said, and Republicans refused. Republicans proposed cutting preventative care funding, and Democrats refused.

Karen Scharff, executive director of Citizen Action of New York, said with students graduating with more and more debt, young families are putting off expenses like buying a house – the kinds of investments and purchases that could help the sluggish economy.

“This year total student debt carried by Americans topped $1 trillion,” she said, more than credit card debt or car loan debt. “This crushing debt is hurting students, their families and our economy.”

Sophia Smart, a recent graduate from the State University at Albany and an organizer with New York Students Rising, said students are already taking out more debt because of increased tuition at SUNY and CUNY schools. City and state schools have raised tuition without consulting students, or explaining why the increases are necessary and why the cost should be passed on to students.

“Those who cannot handle the burden of debt are essentially boxed out from the opportunity to get a college education,” she said.

She hoped the conversation would eventually move from Stafford loan interest rates to how to tackle the $1 trillion in debt owed by students nationwide.

Lynne Theophanis, of Vestal, is pursuing her master’s in social work at Binghamton University – and has two daughters, 15 and 12, who will be heading to college in the next five years. She had paid off most of her undergraduate debt before pursuing her master’s, but when she graduates she’ll owe about $35,000.

“I can’t emphasize enough how alarming it is to me as a parent, and so many others, when we’re looking at the possibility of the interest rate doubling for student loans as I’m trying to conclude my own master’s program and also looking to finance my daughters’ education,” she said.

She chose to pursue her master’s despite the financial struggle, she said, in part to set an example for her children – that they could pursue a college education in this country regardless of age or income.

“I have to say, that dream doesn’t seem as realistic with the possibility of the doubling of the interest rates, and the financial predicament that would put my family and so many other families into,” she said.