The House of Representatives voted to cut $14.3 billion in funding for student aid programs last Friday as part of a congressional reconciliation bill, worrying some students who rely on the funds.
The House and Senate will finalize budget plans for the next five years before the end of the year. With the Senate proposing $9.7 billion in aid cuts as well, federal student assistance programs are expected to take their biggest hit in history.
Students have been fighting the legislation for months. Some have become increasingly dismayed by a perceived indifference among lawmakers towards the burden students already face by taking out student loans.
The number of students graduating with over $25,000 in student loans has tripled since the early 1990s, according to Student Debt Alert, a project run by the advocacy organization the Student Public Research Interest Groups.
Under the new legislation, those numbers are expected to increase. According to the Congressional Budget Office, student and parent borrowers will be taking on about $7.8 billion in new fees through increased interest rates and new fees incorporated into the process.
Specifically, the bill will increase the interest rate cap for student loans from 6.8 percent to 8.25 percent for students and from 7.9 percent to 9.0 percent for parent borrowers, according to the State PIRG’s Higher Education Project.
Activists say the legislation also make consolidating loans more expensive by including legislation that charges an additional 1 percent interest to anyone choosing to consolidate their loans to a fixed program rather than at a variable interest rate.
The changes are a concern for many student borrowers already worried about paying off their existing loans. Deborah Wohl, a student at the University of Maryland, is receiving $2,500 a year from the federal government to help cover a $26,000 tuition bill.
“I’m paying off one of the loans now, and letting the rest accrue interest and then when I graduate I’ll be working on all of them,” Wohl said. “It comes out to $200 a month for me now.”
Though Wohl receives only a portion of her student aid from the federal government, she said she still does not like the thought of her interest rates increasing. That same sentiment has led many to actively protest the budget reconciliation bill.
Others said that rather than focusing on student aid, they’d like to see a greater push to lower tuition to begin with. Elyssa Feins, a sophomore at the University of Maryland, said that lawmakers should account for current economic realities.
“I don’t think it is necessarily the government’s responsibility to provide students with loans,” Feins said. “It should be more of a priority to lower tuition in general but since tuition keeps rising, the government should take into account that most incomes are also not rising, they then have to account for such a deficit.”