8B
Thursday, April 6, 1995
UNIVERSITY DAILY KANSAN
Congress looks to college students to lower debt
Majority wants higher interest federal loans
WASHINGTON — Chris Weber has worked his way through Arizona State University, sometimes two jobs at a time. Even so, he owes $20,000 in student loans. And after more than five years of classes, he still has a year to go.
The Associated Press
"I was really against taking out the loans at first," said Weber, 24, an economics major, the son of an Air Force veteran and his school's new student body president-elect. "I thought I'd just work part-time and go to school part-time. But eventually I said forget it, I've got to get
through."
So, he said, he started taking out loans.
At a time when college tuitions continue to go up, more American students are facing big debts as they leave college.
And, as Republicans in Congress consider making federal guaranteed loans more expensive for students as a way to help reduce the budget deficit, the students are fighting back with a national letter-writing and e-mail campaign and rallies on Capitol Hill.
"We need to balance the budget."
Weber said. "We know that. We're the ones who are going to pay for it if they don't."
But, he insisted, ending the subsidy that allows 4.5 million low-income students to avoid paying loan interest while in college is not the answer.
"If you reduce our ability to go to school, we get paid less, and ultimately we'll contribute less to the tax base," Weber said.
In recent months, President Clinton and Democrats in Congress have seized on that argument as a way to appeal to middle-class voters and illustrate the differences between themselves and the new Republican majority in Congress.
Clinton proposes increasing Pell grants, the basic aid to low-income students, while also offering college tuition tax deductions to parents, and keeping the in-school interest subsidy for loans.
But Rep. Bill Goodling, R-Pa., who heads the House Economic and Educational Opportunities Committee, said the subsidy was tough to justify and says Republicans will consider ending it.
Because students in college have a bright economic future — on average, graduates make $12,000 a year more than those without college diplomas — they should pay all the
"If we have to make cuts (in the federal education budget) to save student loans and Pell grants, that's something we'll look at," Goodling said.
costs of their loans, including interest. Goodling said.
He said, "One of the tragedies of these programs is that we may be actually encouraging college costs to grow." Tuition increases have outpaced inflation in recent years, he said.
About 6 million students, or about half of all regular full-time college students, now get some type of federal student aid, either Pell grants, loans or work-study.
Eliminating the interest subsidy for loans could save up to $12 billion over five years — pure gold to Republicans looking for ways to reduce the deficit and cut taxes.
And it would cost students only pennies more each month, Goodling said. Students would have
to pay an additional $26 to $41 each month, depending on the size of their loans, he said.
For example, a student who borrows $17,000 over four years would owe an additional $3,400, for a total of $20,500, when he or she began repayment. That would increase the monthly repayment over 10 years to $246 from $205.
But Weber said that is too much. "We're talking about my little brother's future, basically," he said.
Weber knows he probably will get out of college before any change takes place. But his brother, T.J., now living with him, attending a community college and working part-time to save money for Arizona State, would really get it, he said.
"The government has put this huge debt on our backs already. By eliminating this subsidy they're just putting a little more there." Weber said.
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