Linking student loan interest rate to financial market could cause grief
As many students across the country begin another homeworkcrazed and sleepless school year, there will be a specific and developing issue on their minds: the amount of loan debt they will have to face and eventually have to pay off once they graduate. Loans have been used for years to help students who could not afford to pay for school all on their own or to relieve parents who were paying for their child or children. However, our government has banded together and decided that the amount of loan debt students and/or parents will face depends on one thing now: the stock market.
According to The New York Times, the U.S. Senate approved a bill tying interest rates to the United State’s rising and falling financial market. Loan rate discussion has been an ongoing issue, which caused a high increase of loan rates on July 1. Though there will be a cap on the rates of Stafford loans, students will still have to look for an increase in rates for the loans they take out starting after July 1. The Democrats and Republicans came to a wary agreement, in which the Republicans had to decrease the interest rate, which they wanted higher, and the Democrats had to listen to the idea being presented.
Now, the logic behind that idea is, well, there is none. The unpredictability of the market is no way to base loan interest rates. The higher the market is, the lower the debt, but in what way does that help loan collectors, who will also either suffer or benefit? If the stock market crashes again, and student loan goes through the roof, all this does is give middle class and low-income families the grief and worry of not being able to pay it all off, leaving the fate of their living situation and money to the ruthless loan collectors. Families pay for their children to go to school, and that means all families from all walks of life shouldn’t have to suffer because the government made a few (or a lot) of mistakes handling the country’s money.
Here’s a separate issue stemming from this: Equality runs deeper than race and sexuality. Social class has always been, and is increasingly becoming more, a part of who somebody is. Education is supposed to be open to all, and for years the government has claimed everyone can achieve a higher education to better our nation, and they stand behind the idea of a better-educated and harder working generation. All this measure is doing is discouraging present and future students from asking for help, which will eventually lead to smaller student populations and an increase of dropout rates, all because some students need a little extra help. It’s dividing the line between who will succeed not just in college, but also essentially in life, based only on money.
Instead of jumping into an idea so haphazardly, discussion needs to be continued. Why is anything related to school, especially student loans, being put on the back burner? Loans will have their positives and negatives, and at this point the negatives are showing through.
Chelsea is a junior majoring in elementary education. She’s been writing for eight years and enjoys the energy that opinion writing creates.