SALT LAKE CITY — Hoping to thwart a potential increase in student loan interest rates, students at Weber State University and Utah State University are calling their congressmen, as well as signing protest letters and petitions.
If Congress takes no action, interest rates for subsidized student loans are set to rise from 3.4 percent to 6.8 percent on July 1.
Student body presidents throughout the state jointly signed a protest letter Friday during the Utah Student Association meeting in Salt Lake City. They plan to send the letter to Utah’s two senators and three congressmen, as well as Gov. Gary Herbert and President Barack Obama.
“We, as student body presidents, are putting our voice out there,” said Weber State student body president Andrew Gardiner, 24, a junior majoring in accounting.
The potential rate increase would affect only undergraduate subsidized loans taken out after July 1, 2012. It would not affect past subsidized loans. The federal government dissolved access to subsidized loans for graduate students earlier this year.
Subsidized loans, or Stafford Loans, are distributed to students who show financial need. The federal government “subsidizes” the interest, meaning interest doesn’t begin to accrue until six months after the student graduates.
This is in comparison to an unsubsidized loan in which the interest begins when the loan is granted. The interest rate for unsubsidized loans is at 6.8 percent.
The protest letter outlines concerns of the student government leaders on behalf of their student bodies: “Many of us are struggling to make our way through higher education in order to better our lives and contribute positively to society. We have great hope that our academic endeavors will benefit our future selves, families and community.
“However, we are faced with the continuing challenges of the recovering economic recession and the difficult search for employment upon graduation.”
Weber State nontraditional student Nate Stoddard, 33, a senior majoring in respiratory therapy, has $26,000 in student loans and plans to take out $4,000 in subsidized loans for his last year of school.
“It (the potential rate increase) seems to be punishing people who go back to school and try to better themselves,” he said.
“It’s a slap in the face to me.”
A total of 6,739 Weber State students took out subsidized loans for the 2010-11 school year.
At Utah State, 7,878 students took out subsidized loans, according to the latest data available from the Utah Higher Education Assistance Authority.
If a student takes out a $5,000 subsidized loan, an increase from 3.4 percent to 6.8 percent interest means $8 more per month. However, for the 10-year duration of the loan, that adds up to be $999.60 more in interest, said UHEAA Executive Director David Feitz.
“The cost of school is already high for us,” said Utah State student body president Christian Thrapp, 23, a senior majoring in international business.
“If the rates double on these loans, that is just an extra weight on our shoulders that is already difficult in this economy where a lot of grads aren’t even finding jobs,” Thrapp said, adding he has taken out subsidized student loans in the past.
Approximately 62,000 students throughout Utah took out subsidized students loans for the 2010-11 school year, according to UHEAA.
Student leaders also agreed Friday to begin an electronic petition and phone call blitz to ensure their congressmen know how much students care about this issue.
Student leaders will be calling their representatives and are encouraging all other students to call as well.
The Associated Students of the University of Utah formulated and launched the protest campaign, including drafting the letter to Congress.
ASUU Director of Government Relations Ali Sadler is 18 and a sophomore majoring in political science and environmental studies.
“This is only one example of a larger trend of tuition going up, of Pell grants being cut and, overall, making higher education more and more difficult for students to afford,” she said.
“It all adds up.”
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