Obama Pledges to Veto Student Loan Increase

Maddie Nicolaisen, Entertainment Editor

 

Congress is proposing to double the interest rates on student loans on July 1 to pay for the government’s massive debt. However, Obama does not support this action, threatening to veto it if enacted. The Obama administration cannot take the opportunity to deny higher education to thousands of students by raising the interest rates on student loans.

The government is now making it possible for many underprivileged students to receive an education by loaning students money to attend universities. The government has been giving loans to students who can’t pay for college, which students try to pay it back after they graduate.

However, with the difficult job market, it is becoming increasingly difficult to pay the loans back. By doubling the interest rates on student loans from 3.4 to 6.8 percent, students will be paying back the loans for a number of years after graduation. The Federal Reserve Bank of New York has estimated that about 15 percent of Americans, about 37 million people, already have a massive student loan debt.

If the government raises the rates, this number of Americans in debt may rise.  Or, fewer students will apply for the loans, and college, knowing that it will take years to pay their debt back.

Obama seeks another way to pay for the $6 billion federal debt such as requiring some privately owned companies to pay higher payroll taxes for Social Security and Medicare. Obama should continue to work to find other ways to pay for his administration’s debt.

According to the Department of Education, an interest-rate increase would affect more than seven million undergraduate students. In our fast paced, modern world, getting a college degree is becoming even more essential in order for future generations to aquire well paying jobs.

The jobs then would help them pay back the loans that allowed them to receive such an education. Giving students the loans would help them get a job, and better the economy.

Keeping student loan interest rates low is a key part of Obama’s campaign. Obama has been busy touring colleges such as the University of Colorado, Boulder and University of North Carolina, Chapel Hill promoting his promise to veto the increase.

Whether Obama is just doing this to get support from the young-adult category or not, he is doing the right thing. The government should not use student loans as a way to pay back its huge debt.  Students cannot be punished for the government’s bad spending habits.

It is imperative that the government does not raise the interest rates on student loans. The government must find another way to get itself out of debt.