Some University of South Carolina Beaufort officials are urging a bipartisan group of U.S. senators to enact an emerging deal to lower interest rates on student loans.
USCB vice chancellor for student development Doug Oblander worries about the long-term implications of saddling students with higher loan payments.
About half of the university's 1,800 students took out subsidized Stafford loans last school year.
"Students may still borrow the money, but what it means to them after they graduate is the real concern," Oblander said. "... It is a significant financial burden to place on students' shoulders, and I'm not sure it's beneficial long-term for access to college or the well-being of the national economy, as students defer buying homes and cars or going back to school because they cannot afford it."
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Rates on subsidized Stafford loans -- available primarily to low-income students -- doubled to 6.8 percent last week after congressional inaction. Efforts to restore those rates to 3.4 percent were abandoned Wednesday in favor of a new compromise calling for interest rates on new loans to be based on the 10-year Treasury note plus an additional 1.8 percent.
Existing loans are not affected by the rate increases.
In-state tuition and fees at USCB are about $9,000 annually. If a student borrowed that amount through a subsidized student loan, the difference between a 3.4 rate and a 6.8 rate is about $15 a month, according to an online calculator
In all, the 6.8 percent rate adds about $1,800 over the life of the loan. While that may not be enough to make the difference between going or not going to college for most students and their families, it could be enough to make some out-of-state and low-income students reconsider their choices, said USCB admissions counselor Kyree Whitehead.
Whitehead graduated from USCB this spring with a Stafford loan and worries about being able to afford future education.
"Attempting to go back to school for a master's or to earn some certification seems bleak, if not impossible, especially if you already have loan debt," he said.
HOPES FOR A COMPROMISE
Senate Democrats failed Wednesday to overcome a procedural hurdle to extend the 3.4 percent loan rate for a year.
Republicans, including South Carolina Sens. Lindsey Graham and Tim Scott, blocked that measure, arguing that Congress should adopt a long-term solution and peg student loan interest rates to the 10-year Treasury note's yield.
Under the T-note proposal, rates for students this fall would be around 4 percent and would be capped at 8.25 percent in future years.
A press aide for Scott said Thursday there were too many moving parts in the current negotiations to say whether he would support the deal, but the aide said Scott was supportive of an earlier proposal that tied rates to the T-note.
"As someone who almost failed out of high school, I know firsthand the importance of ensuring that all students are able to receive an affordable, high-quality education," Scott said in an emailed statement. "I am hopeful that we can come to an agreement on student loans that provides sustainable, long-term reforms, rather than politically driven legislation."
Graham spokesman Kevin Bishop said the senator "is still reviewing the fine print, but he is encouraged by the market-based approach of the bipartisan compromise plan."
-- The Associated Press contributed to this report.
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