Does it feel like your lawmakers don’t understand or care about student loans and interest rates?
At least some of them do. Annual financial disclosure reports for the U.S. Senate and House of Representatives released in June 2012 pointed out three lawmakers who still owe more than $10,000 in student loans – sometimes, a lot more.
- Representative Cathy McMorris Rodgers of Washington reported owing more than $10,000 in student loans from 2003. Rodgers is a four-term Republican who attended the University of Washington for a masters degree in business administration.
- Representative Linda Sanchez of California reported owing more than $15,000 (possibly as much as $50,000) in student loans from 1992. Sanchez is a five-term Democrat who attended law school at the University of California at Los Angeles.
- U.S. Senator Marco Rubio of Florida reported owing at least $100,000 (possibly as much as $250,000) in student loans through Sallie Mae from 1996. Rubio is a first-term Republican who attended law school at the University of Miami.
The annual financial disclosure reports for the U.S. Congress say that these lawmakers are the exceptions, not the rule. In general, our elected officials are not among those Americans who find themselves beneath the shadow of student loan debt long after they are established in their careers.
These reports came out less than a month before the scheduled July 1st interest rate hike for student loans – from 3.4 percent to 6.8 percent. Congress and the President struck an agreement to defer the rate hike for an extra year, so we’ll be in the same situation again next summer.
Student loan debt figures are on the rise. According to the Federal Reserve Bank of New York (as reported by Bloomberg News in June 2012):
- Total student loan debt was $874 billion in the fourth quarter of 2011 and $904 billion in the first quarter of 2012.
- Student loan debt rose by $64 billion from 2011 – at the same time all other forms of household debt dropped by $383 billion.
- Nationally, student loan debt totaled more than credit card debt.
The deferred interest rate hike also included some other elements:
- Graduate Student Stafford Loans will have interest at the 6.8 percent rate. They will not benefit from the interest rate deferral. In addition, graduate school loans taken out after July 1st 2012 begin accruing interest immediately – not after graduation.
- Certain grace periods have been abolished.
- Repayment incentives for loans taken out after July 1st 2012 have been ended.
- Limits have been made on the amount of funding available and the number of eligible semesters. It may become more difficult to qualify for funding at all.
There’s that old saying about not knowing someone until you walk a mile in their shoes… or perhaps pay back their student loans. Now we know that there are at least three people in Congress who understand what it’s like to walk in the shoes of student loan debts.