Student Loan Rates Double
President and Congress Fail to Prevent Increase
Stacy M. Brown | 7/2/2013, noon
President Barack Obama has struggled to meet the expectations of African Americans as unemployment levels continue to soar in black communities, his health care plan remains questionable and many of his supporters are growing increasingly skeptical by the day.
Now, the first African-American president stands to alienate many of those who knocked on doors and pounded the pavement throughout the country to ensure his re-election to the White House, specifically young black college students.
“You have black students from low-income households about to enter college or who are already there and pressing toward graduation, persisting just as Obama urged them to do, only to have his administration pull the rug out from under them,” said Johnny Taylor, 39, president of the Thurgood Marshall College Fund, a nonprofit organization in Northwest that raises tuition money for black students who want to attend college.
Taylor, a mover-and-shaker in the fundraising arena, said that he’s disgruntled with Obama’s education policies. “We continually receive telephone calls, emails and visits from parents who call the president’s plan a disaster.”
Obama and members of Congress failed to prevent student loan rates from doubling, as lawmakers recessed on Monday, July 1, prior to the Independence Day celebrations.
The president’s policies regarding student loans have been criticized by numerous officials at the United Negro College Fund (UNCF), based in Northwest. Officials contend that the higher interest rates will inevitably make it more difficult for black students to afford a college education.
“Obama’s denial of loans to black students is appalling, and a nasty surprise,” Michael Lomax, the UNCF president said last week, as the clock ticked down on the deadline to prevent an overall increase in interest rates.
Other UNCF officials agreed.
“It is particularly ironic that, at a time when the administration has set a goal to increase the nation’s college graduation rate to 60 percent by 2020, this policy shift occurs that will make reaching the goal impossible,” said Cheryl Smith, UNCF senior vice president for public policy and government.
On Monday, July 1, the interest rate on subsidized Stafford loans, which are used to assist undergraduate students, rose to 6.8 percent from 3.4 percent after Obama and Congress failed to reach agreement on an alternative plan prior to the deadline.
The African-American community had previously complained that the president’s policies, which included denying many black students’ loans due to their parents’ less than pristine credit ratings, have jeopardized educational opportunities for young people of color.
“The tougher credit criteria [creates] a disparate impact on under-represented minority students, the very ones who stand to benefit the most from a college education,” Smith said.
By doubling the loan rate, approximately 7 million college students, including more than 1.5 million African Americans, are going to be adversely affected.
“While some African-American students are fortunate enough to come out of college debt-free, many are not,” said John Wilson, executive director of the White House Initiative on Historically Black Colleges and Universities (HBCUs), an independent agency, aligned with the U.S. Department of Education. “Increasing the student loan rate at a time when America needs a workforce that can compete in this global economy is not smart business,” he said.