Student Loan Debate Reaches Senate

For the first time in U.S. history, student loan debt is expected to pass consumer debt.  According to an article in The Wall Street Journal, student debt has now topped $1 trillion, causing many college graduates to postpone purchasing their first home, getting married, or having children.  The student loan debate has reached the Senate, where the White House has pressed lawmakers Monday to back legislation preventing interest rates on federal student loans from doubling in July as the two parties remained deadlocked over how to pay for the move. If the bill passes, it would mean that the federally-subsidized Stafford Loan Program would keep its current interest rate of 3.4 percent, rather than doubling for another year.  This decision affects 7.4 million students, whose borrowing costs would rise by $1,000 over the lives of their loans if the interest rate doubled, as mentioned in an article in The Huffington Post. The Department of Education estimates students will borrow $31.6 billion in Stafford loans in the year beginning July 1, average $4,226 for each student.

This post is based on article that appeared in The Huffington Post on May 7, 2012. For more information on how you can financially prepare your child for college, visit our Links & Docs Page, which provides free information on financial aid and scholarships.