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USF students share worries about Stafford loan interest rates with Sen. Bill Nelson

TAMPA — A few students put off law school, scared a looming doubling of government-backed student loan rates would crush them. One student, working full-time at the Apple Store while taking a full load of college courses, wonders how he'll stay enrolled if those rates really do rise. Other students felt the American dream was slipping farther and farther away.

A roundtable of worries greeted U.S. Sen. Bill Nelson at the University of South Florida Marshall Student Center on Thursday as he tried to address whether Congress would be able to stop federal Stafford loan interest rates from jumping from 3.4 percent to 6.8 percent after July 1. The issue affects about 423,000 students in Florida who receive the loans.

"You're cutting down the dreams of an entire generation," said USF student body president Matthew Diaz, a graduating political science and philosophy student.

Nelson had no easy answers with both political parties trying to figure out how to come up with $6 billion elsewhere to stop the rate hike for just one year.

"We have a few challenges," Nelson said, "and one of them staring us in the face is student loans."

Both parties say they want to extend the current rate. A Republican proposal the U.S. House passed last week would take money for diabetes and cervical and breast cancer screenings, as well as childhood immunizations, Nelson said. A Democratic Senate bill proposes to close a loophole that allows owners of small businesses known as "S-corporations" to avoid payroll taxes — if they make more than $250,000 a year. The bill is just a short-term solution, Nelson acknowledged, but said a permanent solution exists by revising the federal tax code.

Nelson asked students to share their financial struggles.

Christopher Cano, 28, a public administration graduate student, said he already has $100,000 in student loans and will likely accrue $50,000 more.

"It's going to be too much if I'm going to have to pay double," Cano said.

Emmanuel Catalan, 22, a political science major, is the first in his family to attend college but now questions if his brother and other high-achieving but low-income high school students will be able to join him.

Austin Prince, 19, a sophomore microbiology and Chinese major, wondered how the economy can rebound if today's college students are mired in debt.

"It reduces consumer buying power if you're paying off loans for 20 years," he said.

Nelson listened and said he will use all the stories Tuesday, when Democrats attempt to get the votes needed to push the Senate bill through.

"This gives me the personal faces to stand on the floor and tell this story," he said.

Justin George can be reached at jgeorge@tampabay.com or (813) 226-3368.

USF students share worries about Stafford loan interest rates with Sen. Bill Nelson 05/03/12 [Last modified: Friday, May 4, 2012 5:29pm]
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