Federal student loan scheduled for rate hike

Kandese Spikes is one of about 1,600 students at Eastern New Mexico University that have been issued the federal Stafford loan.

CMI staff photo: Christina Calloway

Zackary Hinds, left, and John Bonner are among about 1,600 Eastern New Mexico University students who have a federal Stafford loan. Interest rates for that loan are expected to double from 3.4 percent to 6.8 percent this summer.

She and millions of other college students across the nation have obtained this popular federal loan, and unless Congress acts, the interest rate for this loan is scheduled to double on July 1.

"That's not an OK move," said an angry Spikes, a junior studying anthropology. "If they want people to attend school, that's a good way to keep students who depend on loans away. I'll be like 60 before I pay them back."

According to ENMU Financial Aid Director Brent Small, the number of borrowers for the Stafford loan has increased annually and he doesn't expect this interest rate hike to cause a decline in the number of borrowers.

ENMU's enrollment this fall was above 5,000.

"As other types of state and federal aid are cut, the options a student has are sometimes more limited," Small said. "I think more students will be more cautious when borrowing and not borrow as much money."

As a part of the higher education reauthorization act, the interest rate changes were locked in legislation a couple of years ago so that they steadily declined to 3.4 percent and then increase up to 6.8 percent in July.

Small said the rate hike is getting a lot of attention right now because it is an election year.

"Congress is being lobbied very hard by not only student organizations but also the financial aid community and the National Association of Financial Aid Administrators, Small said. "They spend a great deal of time lobbying our legislators in Washington to try and keep student aid available and interest rates low and there's a good chance they're going to persuade Congress to at least maintain the rate for another year the 3.4 percent."

For students such as Spikes who are upset about the rate increase, Small encourages them to voice their concerns to state senators and representatives.

Rep. Ben Lujan, D-N.M., is a cosponsor of legislation to prevent interest rates from increasing.

"An affordable education is critical to the future of our young adults and the future of our nation," Lujan said. "With the cost of higher education increasing, it is critical that we support our students and keep interest rates low so that people in New Mexico and across the country can afford to go to college and follow their dreams."

Small encourages students who are uneasy about borrowing to visit with him.

"We've all been in their shoes and we understand what troubles they're going through and the questions they might have taking on a debt like that," Small said.

ENMU students John Bonner and Zackary Hinds aren't too concerned with the hike because they agree that the value of education is priceless.

"It's unfortunate, however, you can't put a price on my education," said Bonner, who is from San Antonio, Texas. "At ENMU it's less expensive for me to attend and have an interest rate go up than for me to attend another university back home."

Hinds, who is studying music education, agreed with his friend's sentiments.

"I try not to worry about it too much, I'm here to get my education and you can't put a price tag on it," Hinds said. "If you're willing to learn, you're willing to pay."

With all students who are receiving or seeking financial aid, Small made his department's role clear.

"We want them to end up leaving Eastern with the lowest amount of debt that we can," Small said.