Student loan rates double as Congress dismisses education

Tim Goral's picture
Monday, July 1, 2013

The Senate adjourned for the July 4 recess on Thursday, but failed to keep interest rates on Stafford loans at the current 3.4 percent rate. The federally subsidized loans are set to expire on July 1, after which the interest rate cap will rise to 6.8 percent. Congress ignores students and dismisses education as unimportant.

Sallie Mae is a former government-sponsored enterprise that was fully privatized in 2004 and now trades publicly as SLM Corp. Sallie Mae the private lender that has been generating enormous profits thanks to soaring student debt and the climbing cost of education.

Since the privatization of Sallie Mae, on average the annual cost of education at public schools has risen 57 percent since 2005 to nearly $18,000, according to College Board figures Sallie Mae cites in its latest quarterly pitch to investors. Students at private schools are paying more than $39,000, or nearly 44 percent more than they did in 2005.

As reported November 1, 1999, an agreement between the Clinton administration and congressional Republicans, reached during all-night negotiations which concluded in the early hours of October 22, set the stage for passage of the most sweeping banking deregulation bill in American history, lifting virtually all restraints on the operation of the giant monopolies which dominate the financial system.

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