At UW, Cantwell Urges Congress to Act on New Bill to Decrease Student Debt
Cantwell hears from Washington state students, one graduate says ‘I have a mortgage but no home’
SEATTLE – Today, during a student roundtable at the University of Washington, U.S. Senator Maria Cantwell (D-WA) called on Congress to pass legislation that would lower the borrowing costs for 25 million college graduates with student loan debt. The Senate is expected to vote on that legislation, S. 2432, this week. Cantwell is a cosponsor of the bill.
During the roundtable, a group of Washington college students told Cantwell that they’re worried about how student loan debt will affect their futures and that they hope to see help from Congress in easing their debt burden.
“This is one of the key issues we should be dealing with today – driving down the costs of higher education. We can’t have people coming out of college with student loans the size of mortgages” Cantwell said. “Student loan debt is a drag on our economy. How are these students going to be able to save for cars or houses if they’re paying off student loan debt well into their working days? By refinancing their student debt, these students might be able to save thousands of dollars.”
This weekend, President Barack Obama announced his support for S. 2432, which would allow borrowers who have both federal and private undergraduate loans with high interest rates to refinance at today’s lower rates of as low as 3.86 percent, with no refinancing fees. The Senate will vote on the bill next week. Under the new bill, a student with $30,000 in debt and a 6.8 percent interest rate would save about $5,000 by refinancing to the lower rate of 3.86 percent.
Cantwell heard Sunday from 13 current and former students from University of Washington and other Washington colleges and universities about the debt they are facing. Some students reported taking out loans for $50,000 to $180,000 to finance their education.
“I have a mortgage, but no home,” said Logan Bahr, a 2011 graduate of Central Washington University who is paying off public and privately issued loans and would benefit from the legislation. “I pay the same amount that I pay for rent to my loan companies.”
As the costs of higher education increase, Americans have seen their outstanding college loan debt quadruple in the last decade to about $1.2 trillion. That forces graduates to put off other purchases such as homes or cars, or endeavors such as starting their own business.
Some students said they wished they’d had better information and education about the terms of their loans. Ada Waelder, a University of Washington senior studying political science, said working 60 hours a week during the summer barely put a dent in her student loans. “Right now all I do is pay interest. I haven’t even touched the original amount I took out. It’s a lot to process,” she said.
The Obama administration also plans to address mounting student loan debt. The President announced this week plans to sign an executive order that would expand a law preventing graduates from having to pay no more than 10 percent of their income on student loan payments so the law would apply to loans issued before the it took effect in 2007.
Cantwell also was the commencement speaker at Shoreline Community College on Sunday, where she addressed the issue of student loan debt.
In Washington state, graduates of four-year institutions had an average student debt load of $23,293. That represents a 22 percent increase from 2008. The average student loan debt nationally is $29,000, with 70 percent of graduating seniors carrying public or private debt.
A UW student body working group released a report this week highlighting how UW students struggle to keep up with increasing education costs. The average student paying in-state tuition would have to work 54 hours per week for a full year to afford the full education costs of a year at UW, according to the report. The cost of a full school year for 2013-14 was $27,034, which included tuition, and the costs of room, board, supplies, and transportation.
Michael Kutz, president of the Associated Students of the University of Washington, said financial stress is the most cited reason for students visiting the campus counseling center. “Student loan debt is a national problem but it’s also having some significant local impacts,” he said.
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