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Queens Chronicle

Interest on student loans set to double

Meeks calls on Congress to take action, stresses importance of higher education

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Posted: Thursday, May 24, 2012 10:30 am | Updated: 10:50 am, Thu May 31, 2012.

Like many in Southeast Queens, John Harris, 26, a resident of Rosedale, is working hard to pay off his student loans. He is just getting a handle on paying what he owes, but if the interest were to double, as is expected if Congress doesn’t take action by July 1, he will be struggling to keep his head above water.

“When you talk about having immense debt and then with only being able to make the minimum payments and to have the interest compound on top of your principal amount, it makes for a very hard time,” Harris said.

It took Harris nine months to find a good-paying job after he graduated from Hartford University with a degree in economics. In the interim he took several minimum wage positions.

Harris shared his story at a press conference organized by Rep. Gregory Meeks (D-Jamaica) on Monday, during which he called on Congress to prevent the increase to student loan interest and announced a meeting he will be having next month to educate people on how they can better address what they owe.

The average student debt in New York State is $26,271, according to a report by the Institute for College Access and Success. The Sixth Congressional District has large numbers of students and professionals who have student loan debt and may be financially distressed because they are unemployed, Meeks said.

Many students rely heavily on Stanford loans, which are distributed by the U.S. Department of Education, to pay for college. The current student loan interest rate is 3.4 percent. Without Congressional action, it will jump back to 6.8 percent on July 1 when legislation from 2007 that cut it in half expires. The increase would affect more than seven million students across the country.

“This burden shouldn’t be placed on our young people,” Meeks said. “We should be trying to figure out how we can make education less expensive.”

Meeks said he knows firsthand how hard it can be to pay off a student loan. It took him 15 years to pay back what he owed, but he said it was well worth it. Now, he wants to make sure his constituents have an easier road.

“I grew up in public housing, and it was a struggle,” Meeks said. “It was the life dream of my parents for me to get to college, and the same is true of a lot of other parents, but you can’t do it without loans.”

He said the increase would deter students from pursuing higher education for fear of incurring massive debt and possibly ruining their credit. Fewer people seeking a higher college degree puts the country at risk of not being able to remain viable in a global economy.

“Lets incentivize education,” Meeks said. “Let’s try to figure out creatively how we can incentivize young people to go to school, get an education and then contribute back and have some relief on that loan. That is the kind of investment we should be making as Americans.”

Aside from pressing for an extension of the lower interest rate, Meeks has organized a “know the options on student debt” town hall meeting at York College on June 13. It will take place at 5:30 p.m. in the faculty dining room at the college, located at 94-20 Guy R. Brewer Blvd.

Meeks said the money needed to keep the interest rates steady could be generated by raising revenue and employing cost-saving measures but did not elaborate.

The cost to the government is estimated at $6 billion a year. But the United States is borrowing about $1 trillion a year.

The price of a college education has continued to rise over the last decade, according to Ronald Thomas, the vice president of York College, making it beyond the reach of many capable and talented students. The pending increase poses great risks, Thomas said, preventing many students from being able to continue their education.

Jennifer Ching, project director of Queens Legal Services, said the group serves 10,000 borough residents annually and all of them have some type of debt issue. She said student loan debt disproportionately affects low-income and minority communities, adding that she also had struggled with it.

“I have a luxury because I had degrees that afforded me the opportunity to have economic and employment choices,” Ching said. “But I can tell you, it was not a luxury to have $289,000 in debt that followed me into my marriage, that followed me into my ability to get a mortgage, and followed me into my ability to a credit card.”

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