It seems student loans have become a trendy topic of conversation among political hotshots, which is fitting in light of the Stafford loan interest rate doubling from 3.4 to 6.8 percent just a couple weeks ago.
The obligatory splurge of angry social media after the increase was something easy to foresee. Obviously, when someone tells you that you will need to pay them more money than you originally planned, it's kind of enraging. But a recent congressional debate should have students far more concerned; while it provides a short-term solution to the nearly 7 percent interest rate, it could mean an even higher rate for future generations.
The proposal, deemed a "compromise," would tie the student loan interest rate to the financial market and bring student loan interest rates back below 4 percent. This all sounds nice and pretty, until you factor in the whole "tied to the financial market" thing.
In an article written by The Nation reporter Zoë Carpenter, this tie to the financial market is a short-term win for students but a long-term detriment. Interest rates could ultimately skyrocket within four years, making the Stafford interest rate barbarically high.
It's easy to sit around and criticize this proposal, but it left many of us questioning: "What is the real root of the student loan and financial aid dilemma?" It seems nowadays that the multifaceted problem of higher education affordability and accessibility is synonymous to the age-old question, "What is the meaning of life?"
Suddenly, we realize that maybe we don't actually know much about how student loans work. Whether its our friend's anecdotes of having to take out student loans to afford cost of living or our own financial aid woes, we realize that it's just so easy to take out student loans. This is partially because of the low interest rate (in comparison to a credit card's) and partially because of ease of accessibility.
We all know that with the push of a few magic buttons, money appears and voila, we can afford rent. But this has a lot to do with lack of education. Student loans are easy to accumulate when the mentality is "Oh, I'll just take out a couple thousand dollars this once, then I'll pay it back."
This is not OK.
Far too often has the phrase "You will likely have student debt when you graduate" graced our ears. Debt should never be a precedent. Debt and our mindless accumulation of it is what got us into trouble in the first place.
So what is the real root of the problem that is paying for college? We're spending money that we don't have. This opens an entirely new can of worms, such as arguments that the cost of living is too high for 20-somethings to afford while attending school full-time or there isn't enough funding for public universities to provide education for minimal tuition.
But, in reality, it seems we just swing from one short-term solution to the next, treating symptoms of a monster virus that we just can't seem to contain. Surely making interest rates higher for future generations is absolutely unfair, so how will we fix it for them, too?
Chances are, we won't.
You will hear older generations boast that they only payed a couple hundred dollars for their Ivy League education, while our generation now accumulates tens of thousands of dollars of debt. Perhaps one day students will pay much, much more —– but we certainly hope that that is not the case.
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