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UCSB Students React to Possible Loan Interest Rate Hike

Assemble on Campus and Gather Petitions, Photos to Send to Congress


Friday, April 19, 2013
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Last week, President Barack Obama unveiled his budget for the fiscal year 2014, ruffling a few feathers in the process despite a well-intentioned proposal addressing student loan interest rates.

Students at UC Santa Barbara joined the California Public Interest Research Group (CALPIRG) and the University of California Student Association (UCSA) for an April 11 press conference reacting to Obama’s proposal and entreating Congress to once again defer interest rate hikes while students hash out more comprehensive methods of reform.

Assembling outside The Arbor, a convenience store located at the heart of UCSB’s campus, student leaders and advocates demanded action, hoisting signs that read “Congress, Don’t Inflate My Rate,” gathering petitions and photographs to send to Congress, and signing their names to a “wall of debt” before exclaiming, “Mr. Obama, tear down this wall!”

On July 1 of this year, the interest rate on all Stafford student loans — which Congress currently determines by statute — is scheduled to double from 3.4 percent to 6.8 percent, compounding the cost of higher education and leaving many students to desperately scrounge funds to pay for school.

If all this results in a case of déjà vu for you, stay calm; you are neither delusional nor trapped in a time loop. Exactly one year ago, a nearly identical dilemma confronted college students across the nation. With the increase originally slated for July 1, 2012, President Obama — who, at this time last year, was bolstering his campaign for reelection — managed to keep disgruntled students at bay by advocating freezing rates at 3.4 percent. Congress complied, extending the low interest rates for a year.

Now, with the deadline fast approaching, Obama’s new proposal plans to take student loan interest rates out of Congress’s hands. Instead, it opts to tether them to a new system based on current market rates.

The Obama administration claims this market-based system would both keep interest rates from fluctuating and ensure that no borrower spend more than a 10th of his or her income on loans. Nonetheless, students are still worried about how much debt they will graduate with, fearing that the overhaul would keep rates low in the short-term but nevertheless result in larger dues down the line.

According to UCSB CALPIRG organizer Kat Lockwood, a whopping 44 percent of UCSB students have Stafford loans over $5,000. For these students, a post-grad future that might otherwise be bright and promising is instead fraught with serious financial concerns.

Although the Obama administration is eager to make higher education as accessible as possible, and is reportedly willing to work closely with students on this issue, those invested may want to keep abreast on the rate debate, which will only intensify in the coming months.

Comments

Independent Discussion Guidelines

The way we are turning our children into indentured servants by saddling them with huge amounts of debt is unconscionable. Kids, go to community colleges for the first 2 years, then transfer to an affordable school, if you can find one. Nothing is worth starting out your adult life with over $100,000 in student debt.
We need a serious reassessment of spending priorities. I say spend less on the old and the permanently unproductive members of society, and spend more on educating the young. They are our future.

blackpoodles (anonymous profile)
April 19, 2013 at 2:30 p.m. (Suggest removal)

All of the new structures on the UCSB campus are nice but not worth making education financially unattainable or a pathway to indentured servitude.

Ken_Volok (anonymous profile)
April 19, 2013 at 2:53 p.m. (Suggest removal)

Soylent Green!

On a more serious note, current UC Budget is here:

http://regents.universityofcalifornia...

Check out Display (Figure) 6:

- Rising student enrollment
- State funding dropped sharply after the 2007 recession started.
- In the past few years, the rise in tuition has matched the fall in state funding.

Other things to note ... UC's physical plant is very old. On page S32:

" ... about 60% of University facilities are more than 30 years old) ..."

And state funding for deferred building maintenance has dried up. Many more facts to dig into for those interested.

EastBeach (anonymous profile)
April 19, 2013 at 8:55 p.m. (Suggest removal)

College tuition has increased much faster than the rate of inflation. Why? Because they can. Student loans seem like free money, so it makes it easier for colleges to raise tuition.

Botany (anonymous profile)
April 19, 2013 at 9:36 p.m. (Suggest removal)

It's not free for the person doing the borrowing.

Ken_Volok (anonymous profile)
April 19, 2013 at 11:30 p.m. (Suggest removal)

yes, blackpoodles, we're "turning our children into indentured servants by saddling them with huge amounts of debt" -- and Botany is half-right, sometimes student loans seem like free money (it did not to me since I needed 10 years to pay my own off)...
But as we PRIVATIZE UC and other public institutions, they have to raise tuition to meet real-market costs. And yeah it ain't free to great young Americans many of whom will spend years paying their debts off.
Don't completely agree poodles when you state we should "spend less on the old and the permanently unproductive members of society". MANY of the so-called old are very productive members of society! For all those hanging half-dead off the end of the branch, there are many 70 year-old performing very important functions in our society. (Disclosure: I'm 65 and working.)
But we in USA fear death so much we can't even talk about it: here we live a bit longer but often need a lot longer before finally expiring. Poodles, who would make such a decision? here are your death panels again, either right- or left-wing versions.
Some in our society want to pit the "old" against the "young" -- one method is to make it very difficult for the talented & hard-working young to find meaningful work (and good jobs). I can see the growing hate from the debt-loaded 20 somethings for the lazy baby boomers, secure (ha) in their social security payments (did I say "for life"!?), full of themselves, failed social idealists, living well in retirement on the south coast....

DrDan (anonymous profile)
April 20, 2013 at 7:17 a.m. (Suggest removal)

You are right Dr Dan, many elders are extremely productive members of society, so let me apologize, rephrase, and clarify my thoughts (or at least attempt to). We spend way too much on healthcare, and a lot of that is on expensive tests and treatment for people in their last year of life, with no positive outcome. I am not advocating death panels. I do think we need to accept death as part of life, and that there comes a time when the best thing you can do for a patient is keep him or her comfortable, both physically and emotionally.
As for the "permanently unproductive," I was referring to the growing numbers of "disabled." At the risk of sounding heartless, when one in 19 Americans is getting SSI benefits, we've got a problem. I am of course not begrudging wounded veterans their benefits (slow to come, in many cases), but when I see attorneys advertising on TV about how they can get me SSI benefits, I get a bit concerned.
Then of course there are huge subsidies to oil and gas companies, the permanent war machine, and agricultural commodities. Oh, and the public employee unions have not exactly skipped their turn at the troth.
No wonder we have to eat our young!

blackpoodles (anonymous profile)
April 20, 2013 at 9:36 p.m. (Suggest removal)

Someones got to feed the ever-growing bureaucracy of the UC system. Who's gonna pay for all those bloated pensions and salaries? The under represented, un-organized student of course. They will learn a good lesson about how to screw over the next generation. Thanks to Das Williams and the State Legislature for avoiding any kind of reform of how the UC system is structured and how it operates.

Georgy (anonymous profile)
April 21, 2013 at 8:18 a.m. (Suggest removal)

Private College is the same issue. I paid $2800.00/ year for room, board, and tuition at a private college. Today it is $50,000.00/year.

My good friend from college paid $10,000.00 his last year in a private medical school and made $45,000.00 as an Intern at a UC hospital in 1980.

His oldest daughter just graduated from medical school, the private medical school she wanted was $80,000.00/year, he convinced her to go to a UC medical school for a lot less. She graduated with honors and now will make $50,000.00/year in a 4 year intern program at a UC hospital.

So the intern pay has not only gone up $5,000.00 in 33 years but the education cost has gone sky-high. Something is not right in the educational system both public and private.

Private medical school $320K, private under-grade $240K, $560K to become an M.D. and then up to 4 more years at wages that do not qualify for a 1 bedroom apartment anywhere near the hospital.

This is why they project a shortage of M.D.'s the entry cost is just insane.

howgreenwasmyvalley (anonymous profile)
April 21, 2013 at 10:36 a.m. (Suggest removal)

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