Issue date: 7/3/06 Section: Opinion

Ivan Flores - The Battalion [Click to enlarge]

After signing the Deficit Reduction Act of 2005, President Bush said, "Our economy is strong and it's getting stronger." It is a complicated act, but one important part is the provision dealing with Stafford Student Loans. In regard to the act's impact on the Stafford Loan program the president said, "The Deficit Reduction Act makes important improvements to federal student loan programs."

Of course, the reality for the students affected is much different than what the president hoped for.

"What I'm telling you is, the students are getting the money, and we're making the program a lot more efficient for the taxpayers," the president said regarding the money shaved off of the federal budget by this act.

On July 1, Aggies paying for school with student loans began to feel the effects of the money that the president said they would be getting. On that day interest rates on student loans jumped to a fixed 6.8 percent, up nearly two points from the earlier variable rates. Parent Loan for Undergraduate Students (PLUS) loans will also see a rise from 7.9 percent to 8.5 percent.

Also, in a manner similar to junk mail credit card offers, the government increased the amount students can borrow at all levels of higher education. This increase in student loan interest rates is an excessive burden that should not be placed on students who already have to borrow to go to college.

"I'm not too worried about consolidating my loans before the higher interest rates," senior psychology major Angelica Ramirez said about her chances of paying off her debt in the strengthening economy, "I'll probably be dead before I can pay them off anyway."

Ramirez's pessimism is a reflection of the fact that poor and middle class students are burdening themselves with a huge debt load in order to afford a university education that has become almost mandatory in today's society.

The average debt burden for an undergraduate is $19,000, not including private loans, according to the Department of Education's National Center for Education Statistics. This overwhelming burden has many adverse effects on the nation's economy as well as the personal choices students make after graduation. Graduates are often forced to take the best paying job they have access to, instead of one that fits with their ideals. Forget giving back to the community in a poor school district - graduates often need money right away in order to get relief from their crushing debt burden.

Continued...

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