It should come as no surprise that the US Senate at the last minute passed legislation preventing student loan interest rates from doubling this upcoming fall. In a bipartisan deal that keeps interest rates on student loans at bay temporarily. College affordability and improving access to higher education has been a hallmark initiative of the Obama Administration. With keeping interest rates low, more and more students – especially those who come from underprivileged backgrounds, will be able to afford higher education and receive the right training to prepare them for their dream career.
The Senate voted 81-18 to lower interest rates to 3.86% for undergraduates taking out government-subsidized loans.
Sadly, interest rates for subsidized Stafford loans, which are taken out by graduate students, doubled. The rate went from 3.4% to 6.8% this past July, affecting over seven million students. Graduate student loans are a key financial instrument for those looking to becoming doctors, lawyers and other professionals that require master’s and doctoral education.
Some economists predict that the student loan crisis could easily balloon and cause a major fiasco for banking systems. Millions of students across the nation find themselves saddled in high amounts of student while at the same time finding it increasingly difficult to find stable employment opportunities that pay high wages.
Many students and those seeking to switch careers are beginning to realize the woes associated with taking out massive amounts of debt in order to pursue higher education. While some explore more affordable options like going to an accredited online school versus a traditional brick-and-mortar institution; others are relying heavily on local community colleges to keep their education costs low.
Although college tuition is steadily rising and other costs associated with college have skyrocketed over the last decade; the Obama Administration has taken steps to creative programs to help alleviate the debt of students who plan on entering careers in the nonprofit sector. One program cancels out student debt after ten years. Students are required to have worked in a nonprofit setting (school, hospital, government agency, charity, etc) for at least ten years while making on-time payments. Another federal program, the TEACH grant, gives students a scholarship if they become teachers in undeserved inner-city and rural communities. Also, the Obama Administration has taken steps necessary to provide similar incentives to those who plan on becoming medical professionals in rural communities.
Although economic recovery might seem bleak, there are signs that things are steadily improving for students and their prospects to land high wage jobs after graduation.