Attention future and recent college grads: starting next Monday, the interest rates on government-backed student loans will jump from 3.4 percent to 6.8 percent. This doubling of interest rates stems from the Government’s inability to compromise on a deal to prevent an automatic rise. Lawmakers claim that a deal could still be reached after the July 4th recess, but if not then these new rates will be here to stay.
This news is a crushing blow to college graduates harboring student loans. Already, millions of college students and graduates find themselves weighted down by exorbitant student loans, as well as an economy that does not provide these graduates the work or pay necessary to pay back their debt.
According to Kyle Siefring -- a college student who plans to take out his first college loan this year -- the government is taking advantage of America’s youth because young people are the group less likely to fight back. He said, “College students aren't the most financially literate people. They see a bill, and they just think about how they're going to pay it, and it's something that they can kind of slip under the table and not necessarily face the consequences right away. It's just something that they can kind of kick down the road."
America’s youth apathy towards debt is a terrifying. Student debts are nearly impossible to shed via bankruptcy or other method. If debts are not paid off quickly, the compound interest on them will continue to grow. It’s likely that some of today’s graduates will still be harbored by college debt decades after they finish school.
The painful realities of student debt weren’t nearly as well known in 2009 when I first entered college. Luckily, my family was able to support my education. At this point, however, student debt is so destructive to young people’s lives that is seems inevitable that more and more young people will begin to forego 4-year Universities not because they aren’t qualified, but because it’s just too expensive.