More than 500,000 college students and graduates in California are facing an increase in student debt as a temporary federal student loan subsidy is about to expire.
House Minority Leader Nancy Pelosi, D-California, and Rep. Xavier Becerra, D-East Los Angeles, addressed a roundtable of students and administrators at Occidental College on Wednesday to argue for an extension to the subsidy.
“The education of the American people strengthens our democracy,” Pelosi said. “Education of our people enhances the lives of those who are educated, but it increases our competitiveness internationally.”
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If Congress does not vote to extend it, student loan interest rates will increase from 3.4 to 6.8 percent by July 1.
"If I paid off half my debt now and they doubled the rate I would have to start all over," said senior economy major Matthew Tuckness.
Experts contend that soaring student debts could be the next financial crisis.
Student loan debt, hovering around $869 billion nationally, now trumps credit card and auto loans -- $704 billion and $734 billion respectively.
Business magnate and Dallas Mavericks owner, Mark Cuban, wrote about the student loan crisis in a blog post.
“The crush of college debt has taken an entire generation of graduates, current and future out of the economy. Which is exactly why the economy hasn’t grown and won’t grow beyond microscopic growth rates we have seen so far,” Cuban wrote, in part.
Occidental College president Jonathan Veitch said one of the reasons college tuition increases the way it does is to allow universities to provide access to those least able to afford it.
Republicans and Democrats in Congress have said they are interested in extending the subsidy; the debate is over how to pay for it.