Student Loan Rates Double

President Barack Obama has struggled to meet the expectations of African Americans as unemployment levels continue to soar in black communities, ...[and] Now, the first African-American president stands to alienate many of those who knocked on doors and pounded the pavement throughout the country to ensure his re-election to the White House, specifically young black college students.

“You have black students from low-income households about to enter college or who are already there and pressing toward graduation, persisting just as Obama urged them to do, only to have his administration pull the rug out from under them,” said Johnny Taylor, 39, president of the Thurgood Marshall College Fund, a nonprofit organization in Northwest that raises tuition money for black students who want to attend college.

Obama and members of Congress failed to prevent student loan rates from doubling, as lawmakers recessed on Monday, July 1, prior to the Independence Day celebrations.

On Monday, July 1, the interest rate on subsidized Stafford loans, which are used to assist undergraduate students, rose to 6.8 percent from 3.4 percent after Obama and Congress failed to reach agreement on an alternative plan prior to the deadline.

The African-American community had previously complained that the president’s policies, which included denying many black students’ loans due to their parents’ less than pristine credit ratings, have jeopardized educational opportunities for young people of color.

“The tougher credit criteria [creates] a disparate impact on under-represented minority students, the very ones who stand to benefit the most from a college education,” Smith said.  By doubling the loan rate, approximately 7 million college students, including more than 1.5 million African Americans, are going to be adversely affected.

“While some African-American students are fortunate enough to come out of college debt-free, many are not,” said John Wilson, executive director of the White House Initiative on Historically Black Colleges and Universities (HBCUs), an independent agency, aligned with the U.S. Department of Education. “Increasing the student loan rate at a time when America needs a workforce that can compete in this global economy is not smart business,” he said.

Attending college shouldn’t be a luxury for a few, but a realistic goal for all students regardless of their economic backgrounds, Wilson said.

College students are concerned, as well.

“Doubling the rates on student loans is detrimental to all of us,” said Karen Frazier, a junior at Howard University in Northwest. “There are a lot of students here and around the country with so much talent, but if [we] can’t realize [our] dream of a degree, then the talent is wasted,” said Frazier, 21, a native Washingtonian, who lives in Southeast.
“My mom is still paying back student loans and I wonder if I am digging the same hole for myself,” said Majiah McGraw, a Howard University Spanish major. “I will probably be paying my loans back for the rest of my life.”

And, while McGraw, 20, scrambles to find solutions, many other students who attend HBCUs, including Howard University, Spelman and Morehouse, face precarious futures.

For black student, the statistics are troubling.


The current student loan debt ratio is 81 percent for blacks, 67 percent for Latinos and 64 percent for whites, according to data from the Center for American Progress (CAP), a think tank that develops new ideas for policymakers and scrutinizes current laws pertaining to education.

“Higher student loan rates [will] create an undue burden on students and families of color in particular,” said Washington. “Many families are struggling to make ends meet and an increase in student loan interest rates, especially for a number of African-American households, could make a real difference in deciding on the feasibility of higher education.”

Two-thirds of all students take out loans to pay for college, and their combined debt could have a broad effect on the housing market and overall economy, CAP officials said.

African Americans and Latinos are expected to comprise more than 70 percent of net household income between 2013 and 2020, but student debt could undermine that figure, CAP officials said.

“I’m telling you, the African-American community better look at this, and what this is going to mean to low-income students all over America,” Harkin said.

“They better look at what it means in terms of how much they’re going to have to pay for these government loans.”

Source; http://washingtoninformer.com/