Guest Column: Keeping down the cost of student loans will benefit Arizona, nation

2013-06-09T00:00:00Z Guest Column: Keeping down the cost of student loans will benefit Arizona, nationAnn Weaver Hart and U.S. Rep. Ron Barber Special To The Arizona Daily Star Arizona Daily Star

Since World War II, access to higher education has been critical to the growth of the U.S. middle class and a core value here in Arizona.

Federal student loans are an important tool for ensuring that educational opportunities remain open to as many Americans as possible. The debate over interest rates is a sign that Congress and the nation understand this fact.

Higher education is a critical economic engine for our state and nation: Workers age 25 and older with a bachelor's degree earn 63 percent more than those with a high school diploma, and people with bachelor's degrees also are more likely to be employed.

These differences will only continue as the world economy becomes increasingly competitive and technologically advanced.

Our nation's universities are preparing the next generation of engineers, scientists, innovators and entrepreneurs - and are ensuring that we will have a skilled and creative workforce able to compete on a world stage and contribute to the prosperity of Arizona and the nation for decades to come.

With such high stakes, we must make access to higher education a priority.

Congress and the federal government have understood this for the past 40-plus years: Tax incentives, grants and student loan programs have allowed students to better their lives and grow the U.S. economy.

But with the Stafford student loan interest rate set to double from 3.4 percent to 6.8 percent on July 1, this national tradition is under threat.

The Stafford Loan program broadens access to higher education and is used by families in Southern Arizona to make college more affordable by offering rates significantly lower than privately financed loans.

For its part, the University of Arizona invests a significant portion of discretionary dollars into UA-provided financial aid to help keep its programs affordable.

However, our public universities face acute fiscal stress - and no single school or state system has the capacity to meet all demonstrated financial need.

For example, Arizona state general fund appropriations for the UA's main campus have been cut by 40 percent over the last five years. The UA has managed these reductions through a combination of program consolidations and staff reductions and has made keeping tuition affordable a priority.

But the federal financial aid system also has been impacted:

• In 2011, the federal subsidized loan program for graduate students was eliminated.

• Nationally, more than 30 percent of all students who are paying back their loans are 90 or more days behind.

• And the approximately $1 trillion in total national student loan debt recently surpassed Americans' total credit card debt for the first time.

Even with the fiscal pressures brought on by the economic challenges our nation faces, students should not have to risk their financial futures to fund their education.

At the UA alone, the scheduled increase in rates could affect almost 14,000 students who borrow nearly $69 million annually in Stafford subsidized loans.

Nationally, the increase could affect the approximately 7.4 million students projected to take out such loans next academic year. If Congress fails to act, these students could pay up to $782 more every year over the lifetime of their loans.

Last year, Congress passed a one-year extension of the current rates - and it appears that this year we are facing another last-minute solution. Numerous proposals are being discussed - many of which allow for significant increases in student loan rates that we cannot accept.

Ideally we should have a permanent fix.

It is clear that America's future lies in our ability to grow the middle class, and to do so we must educate our next generation. In the absence of a permanent solution, we support a two-year extension of the current student-loan rates.

Parents and students need to be able to plan and save for education, and we urge Congress to use the ensuing two years, while national interest rates are still low, to pass a bipartisan, long-term solution to keep higher education affordable.

In our view, this solution would be a student loan program that offers a low interest rate fixed for the duration of each loan; students and their families must have the transparency of knowing what their rate will be.

There is no better issue on which we can work together in a bipartisan fashion than keeping the core American value of an affordable education and promising career alive for generations to come.

Ann Weaver Hart is president of the University of Arizona, and U.S. Rep. Ron Barber represents Southern Arizona's District 2.

Copyright 2016 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.