The Fine Print
Brandon Anderson, a 28-year-old Iraq war veteran, is in pursuit of the American dream.
After spending five years in the military and two more at a community college, Anderson was able to transfer to Georgetown University to complete his education. What has made it all possible, Anderson tells The Fine Print, is government-subsidized student loans.
“I could not attend college here or probably anywhere else without the student loan program,” Anderson says, estimating that he’ll graduate $25,000 in debt.
But the interest rates on the Stafford loans upon which Anderson and about 7 million other financially needy students across the country rely are set to double on July 1 from the current 3.4 percent interest rate to 6.8 percent -- unless Congress acts to prevent it.
The House and Senate are at odds over how to address student loan rates.
Last month, the House passed a bill that would tie student loan rates to the interest rate of 10-year Treasury notes, plus 2.5 percent. While the rates of Stafford loans would rise or fall every year under the plan, they could not exceed 8.5 percent. A bipartisan Senate group is taking a different approach and seeking to negotiate a compromise on a three-tiered loan program. Aides say they could reach agreement later this week.
The White House is also deeply involved in negotiations, but the administration’s plan is more aligned with the House legislation.
“College affordability should not be the deterrent that that shuts out low to middle income students,” says Anderson, who is joining forces with other Georgetown students to urge Congress to keep the interest rates at or close to the current 3.4 percent rate.
“We want to make sure that Congress has our back,” Anderson says. “Until we see some sort of legislation that's enacted, that assures students here and abroad, I think that we're going to have to continue to make our case.”
Georgetown student body president Nate Tisa is among those students urging Congress to act. He estimates that he will have $40,000 in loans to repay after he graduates next year and says that if the current rate doubles, it will negatively affect his post-graduation plans.
“Do I want to go to grad school? Do I want to go to law school?” Tisa asks. “Now I'm starting to think maybe I have to work for a few years. Maybe I go back home and live with my parents, quite frankly.”
If Congress allows the interest rates to double, Tisa says he believes it would be “unacceptable.”
“If we as a nation make the decision that we're not going to have affordable rates for loans, then we're essentially making the decision that people who can't afford college at this level maybe don't deserve it,” Tisa says. “And that is absolutely I think, in my opinion and in a lot of the opinions of my peers, totally unacceptable.”
For more of the interview with these students, including what Anderson says students don’t realize when they sign up for student loans, check out this episode of The Fine Print.
ABC's Eric Wray, Alexandra Dukakis, Mark Rabin, and Mark Banks contributed to this episode.