State of Oklahoma
House of Representatives
College Graduates May Soon See Double on Student Loan Interest Rates
By State Representative James Lockhart
June 11, 2012
I am very concerned about the possibility that without Congressional intervention, the interest rates of college student loans will double come July. As a state legislator I am worried about the economic impact this will have for the 40-60 percent of college graduates that do not have a job in their respective field.
College graduates ages 24 and younger face an uncertain job future that is only going to get more difficult if we continue to turn out graduates without what a business executive recently defined as “the skills we need.”
For those fortunate to have secured a job in today’s economic climate, many will discover how hard it is to stretch a paycheck to cover the bills – especially when you factor in student loan repayments, which are calculated under the income-based repayment plan to garnish 10% of your disposable (after-tax) income.
Much of the debt-for-diploma fiasco facing college graduates in rooted in a monumental government shift in which the focus has not been on making college more affordable, but simply more financeable through student loans.
The lion’s share of two and four-year degree recipients need financial assistance to attend college, and as state and federal aid continues to decrease the cost of tuition and fees increase. Students in need who once received grants now must borrow to pay the skyrocketing cost of attending a university.
According to the Wall Street Journal, the class of 2011 is the most indebted in U.S. history, with an average debt burden of nearly $23,000. USA Today has reported that total student loan debt in the U.S. is on track to exceed $1 trillion this year, having surpassed credit card debt.
Given my interest in both K-12 and secondary education, I am proud to be a member of the newly-formed bipartisan Education Caucus in the Oklahoma House of Representatives. One of the top priorities of the Education Caucus is to improve communication and awareness among Members in the House in order to facilitate a better understanding of education issues facing our state. However, the ultimate goal of any education policy drafted will hopefully be to give students the tools they will need to enter the workforce, and to find creative means to lower the albatross of a high debt-for-diploma ratio.
I am somewhat hopeful we can prevent student interest rates from doubling, as both parties in Washington D.C. say they want the same resolution, which is a low rate on student loans for one more year. I hope they reach an agreement before the July 1st deadline. Doubling interest rates on student loans will only make it even harder for young adults who already face a challenging future.
James Lockhart lives near Heavener with his family and represents House District 3.