Since Congress passed a law last year tying student loan interest rates to U.S. Treasury rates, student loans will be revisited each year, and the rates will likely rise ["Heavy burden of college aid," Editorial, July 14]. At the start of July, rates for undergraduate loans rose from 3.86 percent to 4.66 percent. Graduate loan rates rose from 5.41 percent to 6.21 percent, and Parent Plus loan rates rose from 6.41 percent to 7.21 percent.
The tie to Treasury rates makes it likely that student loan rates will rise annually, with the only saving grace being the 8.25 percent cap. Further, the stated 10 percent income payment cap only applies to loans taken after July 1, 2014. The loan forgiveness mentioned is only tied to certain forms of public service professions, and only after 120 payments have been made.
If our government wants to see less default on student loans, perhaps it should consider lowering the rates to a reasonable and consistent level that would make education somewhat affordable to the middle class, which finds it difficult to pay for college. During the federal bailout of the banks, a few short years ago, the loans offered were at below-market value. Some loans were even offered as low as .01 percent.
The questions remains: Why should bankers be allowed this while students and parents struggle to pay college bills? Shouldn't we invest in our future instead of our current, overpaid bank executives?
Beth Haft, Syosset
The annual $137-billion spent by the federal government on college financial aid is small potatoes compared with the $600-plus-billion defense budget.
A highly educated populace brings rewards and advantages to individuals as well as the country. Bravo to Washington for making it easier for students to pay off college debt by capping monthly payments at 10 percent of income. In addition, a thorough investigation of how other industrial countries help with college costs is a must if we are to truly assist in this investment.
Fred Barnett, Lake Grove