If federally subsidized Stafford student loan rates double this year, thousands of dollars in additional interest may hit Walsh College student MiVida Burrus' family doubly hard.
During a news conference Tuesday at Wayne State University Oakland Center in Farmington Hills, the Troy mother of three said her daughter has chosen to follow her example of seeking higher education. Both rely on Stafford loans to cover the cost of tuition.
"Raising the interest rate hurts me, and it hurts my family," Burrus said. "It kind of dampens our dreams and keeps us from believing that we can ever reach the goal that we set out, which is to have that degree, to have that job and be a productive society member."
The family is, by no means, alone. Congressman Gary Peters estimates 7.4 million college students across the nation, 330,000 of them in Michigan, will be hit with about $1,000 in additional interest for each year they attend school if the Stafford loan rate moves from 3.4 percent to 6.8 percent on July 1.
Peters is among more than 150 co-sponsors of a House bill that would tap gas and oil subsidies to cover the estimated $6.4 billion cost of keeping interest rates at their current level. He said House Republicans last week passed a bill that extends the low interest rates, but took the funds out of public health prevention, including breast and cervical cancer screenings for women and immunizations for children.
"That's a wrong-headed approach," Peters said. "It pits higher education against public health."
Peters is looking for people to contact their legislators to voice their concern about the possible interest hike.
Royal Oak resident Will Butler, a student at the University of Michigan, said he has needed student loans to cover tuition even though his parents contribute and he works.
"It isn't right for Congress to make it harder for me," he said. "I'm just trying to make a better future for myself."
Wayne State student Norman Dotson, a Detroit resident, said he is already worried about paying back the student loans, which he said he'll have to start paying back six months after he graduates.
"I'm scared of what's going to happen after I graduate," he said. "I consider myself a responsible adult, I have that debt in front of me, so of course I'm going to pay it ... With the interest rates doubling, it's just scary."
Detroit area ministers who also spoke at the news conference said the interest rate issue is not just about the numbers.
"When you take all of the paperwork out of it, when you take all the bills and the issues away, it becomes a moral issue," said the Rev. Jonathan Combs, pastor of Faith United Methodist Church in Oak Park. He said the higher interest rates will become a burden on families already struggling.
Peters pointed out that Congress recently passed a $22 billion tax cut for Americans who make $1 million or more annually. That would have been more than enough to cover the cost of the maintaining the Stafford loan interest rate, he said.
However, Republicans on the U.S. Senate Republican Policy Committee blog blame the problem on the Affordable Health Care Act, President Barack Obama and Democrats:
"As Congress works on a solution, it’s important to remember that the White House and Democrats in Congress took over the student loan industry in order to fund part of the President’s expensive health care law. Once again, it’s clear that the President’s law was drafted quickly and without any consideration of economic consequences."
The blog also notes that Republicans are "committed to extending the interest rate reduction for another year and also making it cheaper and easier for the private sector to create jobs for young Americans."
Senate Republicans call the Prevention and Public Health Fund (PPHF), from which they propose covering the lower interest rate, a "slush" fund that has already been cut by $5 billion under the 2012 Middle Class Tax Relief and Job Creation Act.