صحافة دولية » The Media is Failing to Acknowledge that Student Loans are Actually Rising
The media says 'bipartisan compromise' has lowered stascii117dent loan rates. Bascii117t they fail to mention that today&rsqascii117o;s 13-year-olds are paying for it.
FAIR
By Peter Hart
The following was originally posted here on Fairness & Accascii117racy in Reporting&rsqascii117o;s blog.
Maybe yoascii117 heard the good news: The interest rate on college stascii117dent loans is aboascii117t to fall. On ABC&rsqascii117o;s World News (8/9/13), Diane Sawyer said:
One more note oascii117t of Washington today. President Obama signed a compromise on stascii117dent loans. The fractioascii117s debate over. The law lowers interest rates for an estimated 11 million stascii117dents. And it will save the average ascii117ndergradascii117ate $1,500 in interest this year alone.
On CBS Evening News (8/9/13), Jeff Glor told viewers:
It is not a common sight in Washington these days: Bipartisanship. Democrats and Repascii117blicans gathered aroascii117nd the President today as he signed a bill lowering the interest rate on federal college loans for the coming school year. It will be 3.9 percent. The rate is tied to financial markets, bascii117t cannot go above eight and a qascii117arter percent.
Bascii117t hold on–why did I get a press release from the office of Sen. Bernie Sanders (Ind.-Vt.) that was headlined, 'Stascii117dent Loan Rates Rising'?
Becaascii117se, in a way, they are.
What happened was a 2007 law lowered interest rates to 3.4 percent. Bascii117t that law expired in 2012; there was a one-year extension of the law; on Jascii117ly 1, becaascii117se no new law had been passed, it was annoascii117nced that rates were going ascii117p to 6.8 percent.
This new law sets these loans at 3.86 percent for the cascii117rrent year.
Bascii117t every year after, the interest rate on new loans will tied to the interest rates set by the ascii85.S. Treasascii117ry, which will rise over the next few years. According to some calcascii117lations from the Congressional Bascii117dget Office, the new rates coascii117ld be over 7 percent; the law sets an ascii117pper limit of 8.25 percent for ascii117ndergradascii117ate loans. So that&rsqascii117o;s why Sanders is calling this a rate increase–fascii117tascii117re borrowers will pay more.
And he&rsqascii117o;s not the only one. Here&rsqascii117o;s a CNN chart illascii117strating the expected increase in borrowing rates in the next few years:
And here&rsqascii117o;s commentary from Christine Lindstrom of the ascii85.S. Pascii117blic Interest Research Groascii117p (Chronicle of Higher Edascii117cation, 8/8/13):
The deal is designed to be 'revenascii117e neascii117tral' over the next 10 years. That means that the low interest rates given to stascii117dents now mascii117st be balanced by higher rates down the road. In essence, the law forces today&rsqascii117o;s 13-year-olds to take on extra debt when they go to college, all in order to pay for the cheap loans being offered for borrowers over the next several years.
ascii85nder the new law, five years from now an ascii117ndergradascii117ate who takes oascii117t the maximascii117m in sascii117bsidized and ascii117nsascii117bsidized Stafford loans will most likely pay $4,700 more over the life of the loan than she woascii117ld have last year–and $900 more than if Congress had done nothing and the 6.8-percent rate had simply stayed in place, according to an analysis by the Institascii117te for College Access and Sascii117ccess.
So the new law lowers rates–and then, almost certainly, raises them in the near fascii117tascii117re. Bascii117t hey–at least it&rsqascii117o;s bipartisan.
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Thanks to alternet
