Commentary: Higher Interest Rates On Student Loans Could Have Long-Term Implications | WAMU 88.5 - American University Radio

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Commentary: Higher Interest Rates On Student Loans Could Have Long-Term Implications

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John DeGioia is president of Georgetown University.
Georgetown University
John DeGioia is president of Georgetown University.

On July 1, the interest rates for Federal Stafford student Loans, which support students with demonstrated financial need, are scheduled to double from 3.4 percent to 6.8 percent if Congress does not intervene. That could affect students enrolling in colleges and universities in the D.C. region. Commentator John DeGioia, president of Georgetown University, says it could also have long-term implications for our country.


The program that would later become the Stafford Loan Program was first established in 1965, and now, for nearly two generations, it has been an invaluable resource for ensuring access to higher education in America.

It is always difficult to establish proper interest rates for borrowing money. Assessing risk and predicting success are two criteria that typically factor into the setting of rates. The Stafford Loan program assumes that the equalizer in setting interest rates is the pursuit of higher education.

At a time when the 10-year borrowing rate stands at 2.2 percent, allowing the interest rate for these student loans to rise to 6.8 percent reflects a lack of belief and commitment in the power of higher education for our young people.

We have a responsibility to protect our young. We also have a responsibility to ensure they have every opportunity to thrive, to realize the American dream.

There are hopeful signs that more young people are seeking and achieving more higher education. College attendance and degree completion are increasing and are at the highest levels in history.

These trends are vital for our nation. Jobs requiring post-secondary education have outstripped the number of young people with degrees for more than a generation. Even more important, the responsibility of citizenship, in this ever more complex and interconnected world, demands the highest levels of education attainment.

This is not the time to create additional barriers to pursuing higher education.

Georgetown's Center for Education and the Workforce has found that, for young people in America today, true financial independence, when someone can fully support oneself without help from others, is not achieved until the age of 32.

The American Dream has been built on the transformative power of higher education. We, as a people, have always honored our responsibility to protect and nurture our young.

As we look across our nation, we can see signs that this commitment is fraying. It is time for us to take a step forward and begin rebuilding the contract that our older generation has to our young.

The time to do that it is now, to step forward and address this matter, to encourage and to bring closure to the discussions in which our Congress and the Obama Administration have been engaged over the course of the last several months.

It is important that our elected representatives recognize, with the clock ticking, that gridlock is not an excuse for our students to go even deeper in debt.

We must summon the political will to ensure that this new burden will not dash the hopes of our young and erect new barriers to higher education.

John DeGioia is president of Georgetown University.

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