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Costly decisions  loom on education

THE COST OF COLLEGE: Student loan interest rates a burden for middle class

  • Recent Conant High School graduates discuss the 50 percent interest rate hike on unsubsidized Stafford student loans.<br/><br/>(Staff photo by Alyssa Dandrea)
  • Recent Conant High School graduates discuss the 50 percent interest rate hike on unsubsidized Stafford student loans.<br/><br/>(Staff photo by Alyssa Dandrea)
  • Recent Conant High School graduates discuss the 50 percent interest rate hike on unsubsidized Stafford student loans.<br/><br/>(Staff photo by Alyssa Dandrea)
  • Recent Conant High School graduates discuss the 50 percent interest rate hike on unsubsidized Stafford student loans.<br/><br/>(Staff photo by Alyssa Dandrea)
  • Recent Conant High School graduates discuss the 50 percent interest rate hike on unsubsidized Stafford student loans.<br/><br/>(Staff photo by Alyssa Dandrea)
  • Recent Conant High School graduates discuss the 50 percent interest rate hike on unsubsidized Stafford student loans.<br/><br/>(Staff photo by Alyssa Dandrea)
  • Recent Conant High School graduates discuss the 50 percent interest rate hike on unsubsidized Stafford student loans.<br/><br/>(Staff photo by Alyssa Dandrea)
  • Recent Conant High School graduates discuss the 50 percent interest rate hike on unsubsidized Stafford student loans.<br/><br/>(Staff photo by Alyssa Dandrea)
  • Recent Conant High School graduates discuss the 50 percent interest rate hike on unsubsidized Stafford student loans.<br/><br/>(Staff photo by Alyssa Dandrea)

Nicolette Laprade, 18, of Rindge will begin cosmetology school this fall to study to become a professional makeup artist, but that wasn’t always the plan. Laprade said in a recent interview that the cost of attending a four-year college is too high and that there are no guarantees that after earning her degree she would be hired by the filmmaking industry where she’s long dreamed of starting a career.

“I’m going to cosmetology school because it’s less threatening. There are so many jobs as a nail technician, makeup artist or hairdresser,” said Laprade, who graduated from Conant High School in June. “It’s always been a second option, though. Originally I wanted to go into filmmaking, but that’s just not a good idea right now. I need to get a job.”

For fellow Conant graduate, Ashley Stevens, 18, of Rindge, being kept from her childhood dream of attending Franklin Pierce University in Rindge this fall isn’t an option. But that doesn’t mean Stevens isn’t worried about the cost of attending her hometown university and the debt she is likely to incur.

“Right now, my mom is looking for another job to help pay for college,” she said. “We didn’t get as much as we had hoped in scholarships and loans.”

The rising cost of higher education in the U.S. is something these recent high school graduates and millions from throughout the country are grappling with as the start of anew semester approaches. And as they look to the future, these students say they aren’t so encouraged by what they see: Doubling interest rates on federally subsidized Stafford loans they need to help pay for college.

As of July 1, the fixed interest rate on federally subsidized Stafford loans increased from 3.4 percent to 6.8 percent. Subsidized loans are awarded to students based on financial need and the federal government pays the interest on these loans while students are in school. The U.S. Senate is expected to vote this week on a bill to convert the current system of fixed student loan interest rates into a market-based system that imposes caps on how high those rates can go. But a handful of Rindge and Jaffrey students who spoke to the Ledger-Transcript earlier this month said they wished politicians in Washington had reached a compromise on the issue before July 1 , and that more needs to be done to make higher education affordable for middle class families.

Sarah Payson, 18, of Rindge said she had considered attending arts school, but she and her family decided against it after learning the cost to attend was $24,000 a semester. Now, Payson said she will attend Mount Wachusett Community College in Gardner, Mass., where she will take her general education courses and decide on a major before enrolling in a four-year school.

“It’s all about finances,” Payson said. “Once I decide on a major, then I’ll transfer.”

Like her fellow high school graduates, Payson said earning a college degree is a requirement today in order to get a good job that pays more than minimum wage. The importance society places on having a degree is even overwhelming at times, she said.

Adrianna Rondeau, 18, of Rindge, who joined her friends, Payson, Stevens and Laprade, by Skype in an interview with the Ledger-Transcript on July 12 said she’s committed to continuing her education at UMass Boston in Boston, Mass., to earn her bachelor’s degree in anthropology. But some of her classmates, she said, have had to defer their education until they can earn more money to fund it.

“There were kids in previous class years that couldn’t continue because they couldn’t afford it,” Rondeau said. She said she wonders how many of them will be able to return to school.

Rondeau, who will begin her sophomore year at UMass Boston this fall, said she relies on subsidized Stafford loans to help pay for school. “I was told they could increase,” she said of the interest rates. “And now that they have, I’m definitely worried. I want to at least get my master’s, if not my Ph.D., so that future debt concerns me.”

Elise Fukuda, 17, of Jaffrey said in a recent phone interview that she is attending college part-time so that she doesn’t have to take out student loans right away.

“I want to get my foot in the door and begin working on my degree,” Fukuda said of her decision to attend Mount Wachusett Community College. “I want to pursue art, but I don’t know exactly what I want to do with it yet.”

For those students who have decided on a career path, Fukuda said she understands their decision to take out student loans. But while she’s still deciding on her own path, Fukuda said she is not going to pay unnecessary interest.

Conant High School teacher Paddy McCarthy of Jaffrey said by phone Monday that she is deeply concerned about the debt students must incur for the chance at a college education. She said she has spoken with local families who are suffering to help make their children’s dreams a reality.

“Higher education is becoming a privilege of the upper middle class,” McCarthy said. “We are squeezing out the kids that would have the chance at a very successful life. I really feel that it is just a tragic situation.”

And the years when a student is in college represent just the beginning of the financial battle, she said. Since the downturn in the economy, McCarthy said more college graduates are finding themselves without jobs or in low-paying positions that make it difficult, if not impossible, to pay down their student loan debt and support themselves.

Democratic U.S. Congresswoman Annie Kuster (NH-02) was among New Hampshire’s representatives in Washington working to prevent the student loan interest rate hike that took effect July 1. Kuster cosponsored a bill, the Student Loan Relief Act, which called for freezing the student loan interest rate at 3.4 percent for two years. But Congress failed to reach a compromise prior to the July 1 deadline and the rate on subsidized Stafford loans doubled.

In an opinion piece published in the Ledger-Transcript in late June, Kuster wrote that students in New Hampshire graduate from college with an average debt of $30,000 — the highest of any state in the country. Because of the new 6.8 percent interest rate, she wrote that students on average will pay approximately $1,000 more per year.

Despite failed attempts in Washington to prevent the interest rate hike before July 1, new efforts are under way for a more long-term solution.

U.S. Senator Kelly Ayotte (R-NH) is backing a bipartisan agreement called The Bipartisan Student Loan Certainty Act. For the 2013-14 academic year, the act calls for an interest rate of 3.86 percent on undergraduate loans . Although that’s lower than the current fixed rate of 6.8 percent, the new rate could go as high as 8.25 percent in future years should the proposed legislation become law.

Graduate students would pay an interest rate of 5.41 percent for the upcoming year and up to 9.5 percent in future years, according to the proposal. PLUS loans — federal loans offered to parents of students who are enrolled at least half time at an accredited post-secondary school — would have an interest rate of 6.41 percent this year and could go as high as 10.5 percent. In 2007, Congress temporarily lowered interest rates on subsidized Stafford loans over four years from 6.8 percent to 3.4 percent. Five years later, Congress extended these rates for one year at a cost of nearly $6 billion, with the expectation that Congress would find a long-term fix in 2012-13, according to a press release issued Friday by Liz Johnson, a spokesperson for Ayotte. But on July 1, the one year extension expired.

Alyssa Dandrea can be reached at 924-7172 ext. 228 or adandrea@ledgertranscript.com. She’s on Twitter at @alyssadandrea.

The rates aren't so much the problem as the cost and type of education pursued. Besides, it is a subsidized rate which means the government (you and I as taxpayers) are paying the difference in the rate so these kids can have a lower rate. This doesn't even account for those who default on their loans all together. $24k per semester at an arts school where the student will be lucky to make $24k per year after graduation. Perhaps some of these students should instead take a class or two in math and economics so they will learn how bad of an idea an arts degree is and how many years they will have to work in the fast food industry before they pay off the $96k they spent for a 2 year arts degree.

This is what our society used to endure! We have no choice but suffer from all changes our lawmakers do. We used to be worried about a href="http://northenloans.ca/blog/get-to-the-end-of-the-month/"how to dispose of money to the end of the montha and forgot about normal way of living - without debt and borrowings. It looks like some kind of nature law: when someone loses, other earn. We have nothing to do with this.

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