Act to relieve loan burden

With the price of college tuition rising across the country, many students have to use some type of financial aid to help them pay for their education, as evidenced by the large number of students at Northern Kentucky University who take out loans.

Approximately 70 percent of NKU students are recipients of some type of financial aid, said Leah Stewart, director of the Office of Student Financial Assistance. The average student graduates from college with $17,500 in federal student loan debt, according to the U.S. House of Representatives’ Education and Labor and Committee.

According to the non-profit organization American Student Assistance, two-thirds of Americans with outstanding student loans have debt preventing them from making major purchases, such as a car or a house. ASA found that many people put off starting families and pursuing careers due to debt.

To relieve some of the financial burden placed on college students after graduation, the House of Representatives passed HR5, the College Student Relief Act of 2007, by a vote of 356-71 Jan. 17. This bill will help enforce lower interest rates on undergraduate need-based federal loans. The legislation would reduce rates on subsidized loans from 6.8 percent to 3.4 percent during the next five years.

However, Stewart does not anticipate much change in the number of students and parents who aren’t taking out loans or in helping students already taking out loans.

“I really don’t foresee the act tremendously increasing our loan volume,” he said.

Stewart thinks NKU students do not take out loans because of a lack of planning. “I think the students and parents have not planned adequately and, in turn, deduce that they cannot afford to attend college” Stewart said.