When Jamira Burley graduates from Temple University on May 10, she faces a new rite of passage — paying off her students loans — roughly $30,000.
“Being an adult is only good in theory — because there are so many bills you have to pay,” said Burley, who on Monday May 7 took part in a national conference call with President Barack Obama, Mayor Michael Nutter and other students to discuss the looming increase in interest rates on student loans.
In addition to Burley, 15 other area college students sat in on the call with Nutter, 74 mayors across the nation, several governors and about 200 students. The call was part of a national blitz to draw attention to the issue during a tough election cycle.
For Burley, though, it was personal.
“You graduate, and the likelihood of you getting a good job is slim, and even if you do get a good job, half of your paycheck is going to paying bills. There is no way to really live,” she said.
By her own admission, Burley is one of the lucky ones.
One of 16 children, Burley, from West Philadelphia, said there was no way her parents could pay for her college. She worked during school, but the more she earned the less financial aid she qualified for, and so her student loans increased.
“I actually came into college with more than $50,000 in scholarships, but I actually worked during my college career and the more you work, the more you make, they give you less student aid,” she said.
Temple cost her between $12,000 and $14,000 a year.
Armed with a dual bachelor’s degree in international business and legal studies, the 23-year old starts a job on May 14, but still, she’s looking at monthly payments that could go as high as $550 a month. Now, she’s faced with another glitch — in July, before she’s even made her first student loan payment, the interest rate could double.
The possibility has Democrats and Republicans in Washington, D.C., in showdown mode, with the Senate taking up the debate Monday. Both sides say they want to keep current interest rates, but disagree on how to pay for it.
Democrats have made a $6 billion proposal that would keep current subsidized Stafford loan interest rates of 3.4 percent from doubling for another year. Republicans oppose how Democrats would finance their measure. Democrats would force owners of many privately owned companies to pay more Social Security and Medicare payroll taxes. Republicans want to eliminate a preventive health fund created as part of Obama’s 2010 revamping of the nation's health care system.
The White House has threatened to veto a House-approved GOP bill similar to the Senate proposal, and Obama has launched a grassroots campaign against the plan.
Republicans are demanding a vote on their alternative measure.
The partisan bickering leaves approximately 7.4 million students, whose Stafford borrowing costs would rise by an average $1,000 over the lives of their loans, wondering if their interest costs will double.
According to the American Student Assistance, the typical college student graduates with $22,700 in student debt.
It’s become something students expect.
“It’s expected,” shrugged Dontay Muhammad, 16, of North Philadelphia. “I’m going to college and I’m going to have all this debt. So, right now I don’t feel any kind of way about it.”
He attends Community College of Philadelphia, but plans to head to the University of Maryland in the fall, where he expects tuition to run as high as $30,000 annually.
There is no way he can afford that on his own.
“I’m going to have to take out student loans,” he admitted. “I see my parents helping with it, so hopefully I won’t have to take out that much.”
Muhammad hopes to keep his loans in the $10,000 to $15,000 range.
That is not to say he isn’t worried.
“Of course it concerns me, because it means more money to pay back,” he said.
With three younger brothers hopefully headed to college, his parents may find themselves stretched.
“This is adding more and more debt on to young people we should be investing in,” Nutter said to reporters after the conference call. “Student debt in the United States of America is now greater than credit card debt and car loans combined. It’s an astounding amount of money that is owed.”
Noting that Pennsylvanians have higher than average student debt, the mayor said higher costs will prevent more people from attending college.
The doubling of interest rates … and if tuitions continue to go up, it continues to get harder and harder to get over that hurdle,” he said. “It makes it that much more difficult for young people to go to college, stay in school and ultimately to graduate. This is literally about attacking our nation’s finest — our students.”
Burley said she supported the president’s plan — and urged others to do the same.
“Young people are suffering in this debt crisis. They are not only being buried in credit card debt, but they’re being buried in loans. It’s important for us as a nation to come together behind the president to make sure our interest rates don’t double — or we’re going to live in a society where young people don’t want to go to college,” she said. “Or, they’re going to be buried in so much debt they’ll never pay it back.”