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Sen. McCaskill discusses rising loan rates with MU students

Thursday, May 30, 2013 | 7:42 p.m. CDT; updated 9:12 p.m. CDT, Thursday, May 30, 2013
Sen. Claire McCaskill met with students as she hosted a discussion on new student loan legislation Thursday at the MU Student Center.

COLUMBIA — Salama Gallimore is about to start her third year at the MU School of Law, but she's got more than difficult classes to worry about.

Gallimore has taken out student loans not only to help pay for her education but also to cover living expenses. By the time she's finished with law school, she'll be about $100,000 in debt. She's not sure how she's going to pay it off, especially given the high interest rates that graduate students pay on their loans.

"I got my credit card in 2008. I'm facing the same interest rate (on student loans), which is a little disheartening," Gallimore said.

Gallimore was among 16 MU students who sat down to talk with U.S. Sen. Claire McCaskill, D-Mo., on Thursday about an impending increase in student loan interest rates.

McCaskill thinks higher student loan interest rates are a bad idea, and she is co-sponsoring the Bank on Students Loan Fairness Act, which would allow undergraduate students receiving subsidized federal students loans to borrow money at the same interest rate as Wall Street banks, or 0.75 percent.

If Congress takes no action, the current student loan interest rate of 3.4 percent will double to 6.8 percent in July. 

"Most important to the future of this country is the notion that higher education remain accessible to every single young person in our country," McCaskill said.

The students who talked with McCaskill on Thursday are taking the threat of higher loan interest seriously. Camille Hosman, a member of the Missouri Student Association, said that although the student loan program was implemented to get students to college, that task is becoming increasingly difficult.

"Loans are no longer looked at as an opportunity," Hosman said. "They're now more of a trap."

Last year at MU, the Office of Financial Aid processed $210 million worth of federal loans, Financial Aid Director Nick Prewett said. Of that amount, $147million came from federal direct subsidized and unsubsidized loans.

McCaskill emphasized that federal resources should be focused on getting students into college.

"We prioritize getting people in at the beginning of the higher education experience, with the assumption that people at the back end will be able to handle the debt load much more easily," she said.

While the legislation McCaskill is working on would lower the interest rate for undergraduates, graduate and professional students are not part of the conversation. Gallimore wants to change that.

"I feel that it is really unfair for graduate students to be paying at 6.8 percent, when it is clearly unconscionable for undergraduate students to be paying the same rate," Gallimore said. "It's definitely something that needs to be addressed."

McCaskill agreed that Congress can't continue to ignore graduate students' debt.

Last week, the U.S. House passed the Smarter Solutions for Students Act that would change the structure of student loans to allow interest rates to change with the free market rather than being established by Washington. 

Fourth District Congresswoman Vicky Hartzler, R-Harrisonville, supported that act.

"The student loan rate issue should not be a political football that is subject to election-year campaigning and other shenanigans," Hartzler said in a news release last Thursday. "This bill ends loan rate uncertainty and strengthens student loan programs to serve the best interests of both borrowers and taxpayers."

McCaskill said the Smarter Solutions act would leave students with floating interest rates that change every year. "I'm fairly certain we can find a compromise that doesn't have floating rates," she said.

U.S. Sen. Roy Blunt, R-Mo., agreed that compromise is necessary on the issue.

"I believe we should work together to achieve a bipartisan, common-sense solution that will provide permanent reform to help young Americans avoid a higher interest rate on their student loans," Blunt said in an email.

While the discussions will peak in the coming weeks, the conversation will continue to focus on undergraduate student loans, leaving graduate students to hope that one day their loans will be considered.

"I'm not really confident that it will be addressed anytime in the near future, but I definitely think we got through to Sen. McCaskill that we need to be a part of the conversation," Gallimore said. "So I believe that's a win here."

Supervising editor is Scott Swafford.


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Comments

Ed Lane May 31, 2013 | 1:19 p.m.

I like the fact that mccaskill says congress can't ignore graduate students' debt. Congress does a great job of ignoring a lot of things, i.e., Immigration, national debt, our borders, energy, education in general, etc. Give us a break claire, earn the nice salary you are getting so you can be one of the elitist in gummit.

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