For months, college students and their advocates have decried impending increases in federal student loan rates. This past Saturday, it happened: variable interest rates on existing taxpayer-subsidized Stafford loans rose from 5.3 percent to 7.14 percent, and new loans were pegged at a fixed rate of 6.8 percent. Doomsday had arrived!
Or had it? As a new report from the National Center for Education Statistics makes clear, it wasn’t very long ago that students faced significantly higher interest rates than those that went into effect Saturday, yet for the most part borrowers were able to repay their loans without great difficulty.
According to the report, most borrowers who graduated in the 1992-93 academic year paid interest rates of 8 percent in their first four years after graduation, and between 6 and 9 percent for the remaining years. Despite that, relatively few borrowers had long-term difficulty repaying their loans, and even many who at some point defaulted eventually got back on track.
What this shows, of course, is that taxpayer-backed loans aren’t nearly the burden on students that college activists have made them out to be. But don’t expect student advocates to admit that anytime soon. After all, if they didn’t act incessantly oppressed by having to pay for some of their own education, it would be a lot harder for them to get politicians to fork over ever-more taxpayer dollars.