STUDENT LOANS

Students describe college debt problems to Harkin

2012-05-18T21:56:00Z 2012-05-19T23:47:25Z Students describe college debt problems to HarkinEd Tibbetts The Quad-City Times
May 18, 2012 9:56 pm  • 

With Congress deadlocked in an election year scrap over how to keep interest rates low on a popular student loan program, Sen. Tom Harkin sought to turn up the pressure on Republicans, hosting a forum Friday in Davenport where students and financial aid advisers predicted long-term hardships if the rates are allowed to double.

At the same time, Harkin, an Iowa Democrat, made it clear he’s not about to budge on his opposition to the GOP’s plan to pay for it by killing a public health program in the Affordable Care Act. Harkin has proposed a change in the tax code to pay for the interest rate buydown.

More than a dozen students and administrators from area colleges took part in the public discussion Friday afternoon at the Kahl Educational Center, the latest in a string of events that have been held in the state to highlight the impending increase.

The most high-profile event was President Barack Obama’s visit to the University of Iowa last month to call for a yearlong extension of the lower rates.

Nicole Brammer, a 26-year-old student at Scott Community College, echoed what others said when she told how she already had racked up $19,000 in loan debt and still had several years of college left.

“For me, doubling that is really going to hurt,” she said.

Interest rates on new subsidized Stafford loans are scheduled to go from 3.4 percent to 6.8 percent for debt taken out after July 1. That, officials say, will add to already heavy student debt burdens.

The president and congressional Democrats early this year called for an extension of the lower rates, and after Obama elevated the issue last month, Republicans in the House introduced their own bill. But their legislation would pay for the $6 billion annual cost by eliminating the Prevention and Public Health Fund included in the 2010 health-care law.

The fund, aimed at paying for preventative and public health programs, is a favorite of Harkin’s. The White House has threatened a veto.

Harkin has proposed paying for the buydown by changing tax laws to require shareholders in certain Subchapter S corporations to pay into Medicare and Social Security. He and other Democrats point to government audits saying some shareholders of these entities mischaracterize some of their income to avoid paying the taxes.

Critics say the change would amount to a tax increase on small business. And they say the move could increase the burden on shareholders who are obeying the law. Harkin says only a small share of the entities would be affected.

Senate Republicans, thus far, have prevented Harkin’s legislation from coming to a vote. But he vowed Friday to stand firm, saying if Republicans didn’t like his funding choice, they could come up with their own.

“But not out of the Prevention and Public Health Fund,” he added.

Already, the $15 million fund was cut by a third to pay for a tax package that got bipartisan approval last year. Harkin voted against it. Eliminating the fund entirely also has raised concerns among public health advocates.

The congressional infighting got little attention at Friday’s session at the Kahl building. Instead, students and administrators told of high college costs and their fear that if their burden goes up much more, some might not be able to pursue their educations.

Brenda Thomas, a 32-year-old Davenport woman with two young children, told the panel the prospects of high loan debt stopped her from continuing in college six years ago. She instead got a good-paying job, she said, but then lost it. After getting more comfortable with the idea of taking on debt in return for an education, Thomas decided to attend Scott Community College.

“When I heard about the increase, I got scared again,” she said. “I have to get my education, because if I don’t, I’m not going to move forward.”

Other students talked about existing debts of between $10,000 and $20,000. One chiropractic student said his debt was $100,000. An official from Palmer College of Chiropractic said students who come to the college after leaving undergraduate programs enter the institution with already-elevated debt loads.

Students and administrators from St. Ambrose University, Davenport, also took part in the event. Each college said it has significant numbers of students who would be affected by an interest rate increase.

In Iowa, 255,000 students overall would be affected, Harkin’s office said.

The dispute over the interest rate issue is only a symptom of the broader problem of escalating college costs and large student debt loads. The overall student debt burden has crossed the $1 trillion line, making it higher than even credit card debt. In Iowa, the average student debt at the state’s four-year colleges is approaching $30,000.

Both issues are sure to be part of the debate next year when the federal higher education act is up for reauthorization.

Copyright 2016 The Quad-City Times. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(20) Comments

  1. Scoblentz
    Report Abuse
    Scoblentz - June 20, 2012 1:48 pm
    Financial education is huge area of opportunity to prevent these graduating students from adding unsecured debt to their student loan burden. Most of these students have unrealistic expectations of starting salaries and just how far those salaries go. Any student facing student loan repayment and juggling credit card debt will be off to an extremely rocky start. Paying off your credit card debt proactively before you graduate should be a priority for students facing student loan debt. There are options that can help you to pay back your debts in full, like debt management or debt consolidation. For more information, www.CareOneCredit.com offers free resources, and tools to educate consumers about unsecured debt
  2. Scoblentz
    Report Abuse
    Scoblentz - May 24, 2012 12:35 pm
    Financial education is huge area of opportunity to prevent these graduating students from adding unsecured debt to their student loan burden. Most of these students have unrealistic expectations of starting salaries and just how far those salaries go. Any student facing student loan repayment and juggling credit card debt will be off to an extremely rocky start. Paying off your credit card debt proactively before you graduate should be a priority for students facing student loan debt. There are options that can help you to pay back your debts in full, like debt management or debt consolidation. For more information, www.CareOneCredit.com offers free resources, and tools to educate consumers about unsecured debt.
  3. just_a_voice
    Report Abuse
    just_a_voice - May 20, 2012 7:36 am
    Any reasonably intelligent person would realize it's a combination of changed majors and living expenses. Most college loans these days will contribute for books, tuition, and a pittance for housing. Hope you have a better grasp on how the situation can work in this instance.
  4. just_a_voice
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    just_a_voice - May 19, 2012 6:27 pm
    It has been brought up several times. Just because Limbaugh didn't cover it the first few times doesn't mean it isn't so.
  5. just_a_voice
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    just_a_voice - May 19, 2012 6:24 pm
    Proof, ALF, proof, instead of made up BS that you are known for. Wow - now a living wage is a higher salary? You are talking about the salaries of coaches. You are pathetic, Alphadog male McQueen. Fascist? You don't even know what the word means.

    I find it funny that Bush II was describe as a Fascist by both Americans and people abroad. Keep recycling, Omegamale........Show us how big of a fool you can make yourself out to be.
  6. Over taxed
    Report Abuse
    Over taxed - May 19, 2012 3:52 pm
    "Nicole Brammer, a 26-year-old student at Scott Community College, echoed what others said when she told how she already had racked up $19,000 in loan debt and still had several years of college left." Per their website, Scott's tuition is $128/credit hour. Most AA degrees require 60 credit hours. $128*60=$7680 should cover her full tuition for her degree. Where did the remaining $12,320 go?

  7. MrGadfly
    Report Abuse
    MrGadfly - May 19, 2012 2:56 pm
    Oh Fred...Why wasn't this brought up before now? Is this another one of those self made crisis's? This is election year pandering plain and simple. It is so easy to blame defense and oil company. What is next, GOP is going to take away SS from our Seniors? This is a classic photo OP for the Dem's and Harkin, and it is all for the cameras. Good to see the Dem's are talking a good game. Maybe if the Dem's would have passed a budget in the last 3 years there would be money set aside for this program?
  8. DJRupe
    Report Abuse
    DJRupe - May 19, 2012 2:56 pm
    Let's take the money out of the B.O.'s and Mouchelle's travel (campaign) budget.
  9. the_whole_truth
    Report Abuse
    the_whole_truth - May 19, 2012 1:30 pm
    Still peddling your idiotic trash? Please, just go away. Everybody here will be much better off when they don't have their IQ lowered reading your idiocy.
  10. Fred W
    Report Abuse
    Fred W - May 19, 2012 12:30 pm
    Kudos to Tom Harkin for taking a stand on behalf of college students. Anyone who has an ounce of sense knows how expensive it is today to pay for a college education. Obtaining a loan for many is the only option. Doubling the interest rate on these people with Stafford loans at this time is an absurdity. Many of these students are already living on the edge trying to pay back these loans. Doubling the interest rate will not only place an unreasonable and unnecessary hardship on the students themselves, but will also cause a significant increase in the number of defaulted loans - defaults ultimately paid for by the taxpayer. Therefore, why would anyone want to make it more difficult for students to pay them back? As for the $6 billion required for funding, how asinine is it to take money away from a preventive health program which will benefit millions, while at the same time giving away $4 billion a year in subsidies to oil companies that are experiencing record profits. And even more incredulous, just yesterday the Republican controlled House passed a defense authorization bill increasing the defense budget by $8 billion - an increase that had been previously rejected as unnecessary by the DOD! Incredibly, the Republicans failed to identify what program offsets they would use to pay for the $8 billion increase. And still more incredibly, this was a reneging of the very budget deal that the Republicans had agreed to last July during the debt crisis. And so it's the same old story with these people - no problem with approving unfunded increases in defense spending or maintaining unnecessary oil subsidies, but any mention of a reasonable funding approach such as Harkin's for keeping student loan interest rates low, and it's met with the same old echo chamber of phony outrage from the right. How utterly stupid!
  11. Alphamale
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    Alphamale - May 19, 2012 11:17 am
    Once again the answer from the democrats is raise taxes on businesses and people with investment income. There is nothing but redistribution from the democrats. Obama and the democrats want to bring back fascism. It is all old Karl Marx stuff, recycled for the latest generation of leftists. How about taking a hard look at the salary structure in our colleges? The democrats have pushed higher salaries for college teachers for decades. You can blame the cost of college on democrats. They are in the back pocket of the education unions.
  12. nitrous55
    Report Abuse
    nitrous55 - May 19, 2012 10:37 am
    We are talimg about a 3% increase. It is ok to ask one group to pay that much more in taxes, why not have this group pay that much more.
  13. MrGadfly
    Report Abuse
    MrGadfly - May 19, 2012 9:53 am
    Good Lord Ed, another amazing piece about the hard work the Dem's are doing for the people of America. Maybe Sunday's paper could be a story about how the Dem's are trying to give us all Toilet Paper for free! Did you wake up to NPR yesterday and get this idea? Why not ask Senator Harkin about the crisis looming in this country on the debt? Why not ask Senator Harkin why nothing was done about this during the two plus years that his party has the majority in the House and the Senate that allowed them to get legislation through like the Health Care reform without ONE SINGLE GOP vote? Why is it now all of a sudden an issue? Could it be an election year? Thank goodness we have Senator Harkin home from the Island's to make his plea for us people of Iowa. How about explaining to the same students how there aren't any jobs for them when they get out of college! Try paying off your loans without a job! Thanks TOMMMM!!!!
  14. Gaius Baltar
    Report Abuse
    Gaius Baltar - May 19, 2012 9:36 am
    Setting aside the whole question of why the cost of tuition has increased much faster than the CPI, the real head scratcher is why in world does congress have anything to do with the interest rate, shouldn't that be determined by the market as it is with other government backed securities?
  15. Steve Brown
    Report Abuse
    Steve Brown - May 19, 2012 9:22 am
    I don't understand the mentality of these folks willing to put themselves at the table of victimhood. The lack of leadership from Harkin and the teachers present at this pity party is the reason these students have chosen their debt. They haven't been taught to think for themselves or to take responsibility for their actions. These are the same people who believe they are owed a job just because they went to college. There are consequences to your decisions and it is unfortunate that you dont have mentors/leaders in your life to tell you this fact. As someone who worked through undergrad and graduate school while raising a family (my choices) and not having school loan debt, I loathe this article.
  16. atlasshrugged
    Report Abuse
    atlasshrugged - May 19, 2012 8:26 am
    I am not rich but I find it interesting that those people who demonize the wealthy are the same ones who want the taxpayers to help them on their student loans so one day they can find a good job and perhaps hit it big.
    Class warfare, race warfare, gender warfare.
    Someday the President will have to talk about his dismal record instead of putting up these phoney baloney issues to help his re-election efforts.
  17. milltownfan
    Report Abuse
    milltownfan - May 19, 2012 8:24 am
    And only a dozen people show up for Harkins campaign pitch? He is still preaching from the same old talking points. Tax & Spend.
  18. Contemptio
    Report Abuse
    Contemptio - May 19, 2012 8:19 am
    Perhaps the problem is the tuition and not the interest rate. Tuition inflation has out paced all other sectors in the economy. Why?

    http://www.finaid.org/savings/tuition-inflation.phtml
    Tuition Inflation
    A good rule of thumb is that tuition rates will increase at about twice the general inflation rate. During any 17-year period from 1958 to 2001, the average annual tuition inflation rate was between 6% and 9%, ranging from 1.2 times general inflation to 2.1 times general inflation. On average, tuition tends to increase about 8% per year. An 8% college inflation rate means that the cost of college doubles every nine years. For a baby born today, this means that college costs will be more than three times current rates when the child matriculates in college. This section of FinAid provides detailed information about the rate of increase of college tuition.
  19. ozyborn
    Report Abuse
    ozyborn - May 19, 2012 7:54 am
    Give me a break. You can not control your own finances while in college? I worked while attending and received my degree without debt. My sister went through nursing school. Yes, she has her degree without debt and is now working on her Masters. It can be done. But it requires a good work ethic. That is what is sorely lacking in today's youth.
  20. Steppenwolf1957
    Report Abuse
    Steppenwolf1957 - May 19, 2012 7:54 am
    Too bad Scott college didn't tell their student about this meeting on the Campus Cruiser web site.
    Too bad the Dept of Education doesn't recongize the Dept of Social Security Disabilty.
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