So the Republicans and Democrats agree that student loan interest rates should stay at 3.4%, but they’re muddling up the whole process because they can’t agree on how to pay for the costs of extending a 50% interest rate cut for one more year.
Well, these two bickering parties will have to come up with a solution soon – especially since it will be students of color that will be hit hardest should the interest rate soar back to 6.8%.
More and more African Americans are graduating with student debt averaging at about $30,500. This problem is made worse by the fact that these same African American students facing unemployment rates of about 30%. African American students also tend to enroll in for-profit schools that tend to have significantly higher tuition fees resulting in higher loan default rates.
And let’s not forget the other effects of excessive student debt: mounting interest rate charges, hindered homeownership opportunities and a delay in establishing new families. These are realities that all students burdened by debt must face, but they are especially prominent for African American and Hispanics as well.
Letting interest rates jump back to 6.8% right now when the aftereffects of the recession are still in full effect is like adding a hundred-pound weight on a sick man’s back. Unemployment rates and tuition fees are still sky-high right now, and letting our students – black, white, brown or whatever – graduate with a chain of student debt around their neck is a dangerous move right now.
I don’t know if Romney or Obama are just grandstanding for the year’s elections, but our future leaders NEED to keep interest rates at a manageable 3.4% at the moment. And they need to do it in such a way that our country doesn’t break from the financial strain of doing so.
But first they have to stop tripping each other up and stabbing each other in the back, otherwise the time to pass an extension will pass and it will be the American people who will pay for the spat between these two sides.