Increase in Student Loan Interest Rates Has No Effect on QVCC Students
While thousands of college students across the country are facing the prospect of paying twice as much interest on student loans, those who attend Quinebaug Valley Community College will not feel the impact of the Senate failing to reach an agreement to avoid the scheduled increases on July 1.
Rates on newly issued subsidized Stafford loans – government student loans often awarded to low-income families – are set to double to 6.8 percent today, forcing some 7 million students to pay hundreds, or even thousands, of dollars more in interest. Student loan debt tops $1 trillion nationwide, outpacing both credit card and auto loan debt.
QVCC stopped participating in the Stafford loan program three years ago, due to the high risk of default and the very small number of students taking out these loans. According to Alfred Williams, interim dean of students, the Financial Aid Office is able to put together packages of grants, scholarships, and other forms of aid for over 60 percent of QVCC students, totaling $4.2 million. Over 40 percent receive Federal Pell Grants, which, unlike loans, do not have to be repaid.
Williams points out that the QVCC Foundation, which raises money for scholarships, is the second largest community college foundation in Connecticut. In fact, over $90,000 in scholarships were awarded to QVCC students in May. The Financial Aid Office and the Foundation have formed what Williams calls a “creative partnership” that finds ways to provide money for tuition, fees, and books for any eligible student. The result of this approach to financial aid is that all QVCC graduates leave the college with no debt to repay. “This is a really unique aspect of the college,” said Dr. Robert E. Miller, interim president.
In Connecticut, the average student debt among graduating seniors is almost $30,000. A week ago Senator Richard Blumenthal (D-Conn.) joined Senator Elizabeth Warren (D-Mass.) in co-sponsoring the Bank of Students Loan Fairness Act that would allow students to take advantage of the same low rates offered to banks through the Federal Reserve discount window, currently at .75 percent. “Our government is scheduled to make $51 billion in profit on student loans this year,” said Blumenthal.” We should not be in the business of profiting off students struggling to earn their education.”
Many are hoping that Congress will retroactively lower the rate hike as soon as they return from the break on July 8.