Subsidized student loans must stay

The facts: On August 2, the Senate gave the final approval to raise the national debt limit by $2.4 trillion. The rise of the debt ceiling prevented a sudden jump in student loan interest rates, but lawmakers considered other measures, including removing subsidized student loans.
Our opinion: The raising of the debt ceiling and its potential consequences will be detrimental to students with financial aid or those already accruing massive student loans.
The increase of the debt ceiling was a controversial compromise that prevented a federal default but opened the door to further economic issues. One segment affected by the raise is federal and bank loans — particularly student loans. The specific effects to University student loans as a result of the debt ceiling are uncertain but deeply troubling, and lawmakers should make sure to maintain subsidized student loans throughout the debt crisis.
Tuition rose by 6.5 percent this academic year, and several reductions have already been made to available student financial aid. Paying for college has become an increasingly difficult task even for those deemed able to pay without financial aid or student loans.
Student loans traditionally took the form of subsidized loans, meaning that students could take loans without interest during the time that they were in school. Lawmakers are now considering revoking subsidized student loans, which would mean that students would have to pay interest while still in school.
With the mounting unemployment rate, it is difficult for students to get adequately paying jobs while in school unless they qualify for programs such as work-study. The complication is that students will not qualify for work-study or other forms of financial aid if they begin accruing income above a certain rate.
This means that students will have to balance loans with interests, jobs with menial pay, the constant threat of losing financial aid, rising tuition and textbook costs, full-time student status and an ever-mounting debt upon graduation.
The raised debt ceiling also means the government will be less likely to support banks providing student loans, which means that banks will be far more selective about their loans. Currently, when students are unable to pay back student loans on time, banks receive their money from the government and students must then reimburse the government. If the government fails to back banks, they will be far more reluctant to hand out loans.
All of these consequences suggest that students’ futures will be negatively impacted if lawmakers do away with subsidized loans. With the current debt crisis it is inevitable that certain cuts and revisions will have to be made to a variety of programs. However, the availability of subsidized student loans is a component of financial aid that should not be altered.
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