SEATTLE – College costs are rising, and millions of young people are facing a mountain of student loan debt. This week, President Obama will announce his plans to help graduating students, and he’s hoping the U.S. Senate will also take action.
Hannah Fredericksen is thrilled to be one of the newest graduates of UW ’s Foster School of Business.
“It’s a great day,” she says. “I have my whole family here, and I’m happy to be with my friends and finish up school.”
But reality is already setting in for graduates about just how much it cost to earn that degree.
“It’s about $20K a year to attend UW now, and that’s if you cut some corners with housing expenses,” Hannah says. “Tuition was raised twice while I was in school. It was pretty scary.”
Many students took out loans to pay for school. They’ll be expected to start making monthly payments on that debt, even though they might not have jobs lined up yet.
“It’s kind of a like a pit in your stomach,” says Erika Sikora. “You wish you didn’t have the loans, but you just have to work for it and pay them off as soon as you can so you can start making money and living.”
Senator Maria Cantwell visited UW Sunday, to talk to students about their financial futures.
“We don’t want students to come out of school with debt the size of a house,” she says. “That puts a drag on our economy, because they don’t become consumers.”
This week, Cantwell will be pressing her colleagues in the U.S. Senate to pass a bill that will allow borrowers who are paying off student loans with high interest rates to refinance. The legislation could help 25 million college graduates. Someone with a $30,000 loan could save as much as $5,000, if their interest rate was dropped from 6.8% to 3.86%.
“We allow people to refinance a mortgage, businesses get refinancing. We want to make sure students can also refinance their student loans.”
President Obama is also expected to take action this week, to expand a program capping monthly student loan payments to ten percent of a person’s income. New graduates say they’d appreciate a move like that.
“It’s kind of unfortunate with our graduating class,” says Sikora. “The economy is still getting better, so a lot of the jobs are lower salary. Even finding a job itself is difficult. So if that was possible, that would help a lot.”