Student loan debt is quickly becoming one of the worst slowers of economic growth in America. Already, total student loan debt has overtaken credit-card debt in terms of total outstanding balance. American students owe more than $1 trillion, collectively. According to May 10 story in The New York Times, this debt is keeping our youngest generation from spending as much as its predecessors; this further stunts an already shaky economic recovery. Instead of making big-ticket purchases such as a home or a car that contribute to economic growth, they are spending their money paying off past debts. And it’s not that they’re piling on even more debt by using credit cards: Credit-card debt among our younger demographic is the lowest of any age group.
This problem is set to get much worse this summer when federal subsidized student loan rates are set to double, from 3.4 percent to 6.8 percent and will further affect our nation’s young people. Last year, Congress passed legislation to extend the lower rate until this year, and now it is back up for debate. Sen. Elizabeth Warren, D-Mass., has now introduced a bill into the U.S. Senate to give students the same interest rates as big banks get from the U.S. government: 0.75 percent.
I urge everybody to contact sens. Michael Bennet and Mark Udall as well as Rep. Scott Tipton to support the Bank on Students Loan Fairness Act. Why should our students have to pay nine times the interest as the banks that ruined our economy in the first place?
As a high school student, I feel very strongly about this issue. It will affect me directly, and it is of paramount importance that we all come together in support of this common-sense legislation. It will really help students all across America.