Rep. Keith Ellison met with students at the University of Minnesota on Thursday to discuss challenges surrounding the ever-rising student debt, urging them to "get vocal" about their interests.
Americans now owe more in tuition debt than credit card debt, and the Project on Student Debt estimates the average debt for students graduating from Minnesota's universities is $29,793, the third-highest in the nation. Minnesota's proportion of students with debt is at 71 percent, ranked fifth in the nation.
Ellison has previously advocated for legislation to keep Stafford Loan rates at their current 3.4 percent for another two years, but he warns rates could double to 6.8 percent if Congress does not act by June 30.
"That forecloses other economic activity -- the ability to by a car, the ability to buy a house," said Josh Winters, of the Minnesota Public Interest Research Group.
Congress faced the same challenge last year and agreed to keep rates where they were; however, that agreement is about to expire and students are left to wonder if lawmakers are going to try to find a solution.
A report from the Congressional Budget Office shows the federal government makes 36 cents of profit on every student loan dollar, bringing in $34 billion next year. That's more than some Fortune 500 companies.
"I think those dollars should be reinvested into debt relief for students across the country, but we also need to look at the big picture too to fund the priorities of this country," Winters said.
Two thirds of subsidized Stafford Loan borrowers are from families making less than $50,000 a year, and because of that, some student advocacy groups say the government should not be profiting from student loans.
"We have attached so much importance to going to college and then say, 'This is what you've got to do to get it," Ellison said.
Ellison and other education leaders fielded a lot of questions at the panel discussion -- and they heard a lot of vented frustration too. Even so, nearly everyone agreed this challenging time for students could be an opportunity to mobilize and be heard.
"Politicians see the light when they feel the heat," Ellison said. "So, get out there and be loud, be vocal."
As for a permanent solution, the White House and many Republicans favor a variable interest rate that would go up or down based on market conditions, but it is still unknown whether Congress will work that out.
STUDENT LOAN RESOURCES
The Project on Student Debt
National Center for Education Statistics - College Navigator
Federal Student Aid
National Student Loan Data System for Students
Minnesota Office of Higher Education
List of student loan debt at Minnesota colleges: http://www.myfoxtwincities.com/story/19852113/list-of-student-loan-debt-at-minnesota-colleges
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