Sunday, May 26, 2013
By KEVIN MILLER Staff Writer
Congressional leaders were working Wednesday to negotiate agreements on two major policy issues that will affect how much thousands of Maine students pay for college loans as well as state officials' ability to develop longer-term highway and transportation plans.
Unless Congress acts by Saturday, the interest rate on federal-backed Stafford student loans will double from 3.4 percent to 6.8 percent on loans approved beginning Sunday. The result would be nearly $1,000 in additional costs over the life of loans taken by an estimated 35,000 college students in Maine and 7.4 million students nationally over the next year.
There is broad, bipartisan support on Capitol Hill to freeze the interest rate at 3.4 percent for at least one more year, and Senate leaders from both parties have said they reached agreement on a way to cover the estimated $6 billion price tag.
Congressional leaders were planning to combine the highway and student loan measures into a single bill to reduce potential procedural obstacles and hope for final approval this week, according to the Associated Press.
Willy Ritch, spokesman for U.S. Rep. Chellie Pingree, said lawmakers were voting on various measures late Tuesday night.
"There is a big push to get things done before the 4th of July break," he said.
Maine's congressional delegation has supported maintaining the lower student loan interest rate and enacting the first multi-year highway budget in several years. Sen. Olympia Snowe, a Republican, has consistently voted "present" on the student loan issue, however, because her husband, former Maine Gov. John McKernan, works in the for-profit higher education industry.
The action -- or inaction -- on the student loan rates comes at a time of growing debate in Maine and nationally over college students' debt load.
Maine college students at four-year institutions graduated with the second-highest debt burden in the nation in 2010, averaging $29,983 per student, according to a recent report from the Institute for College Access and Success. Public college students in Maine graduated with the heaviest debt load in that category in the country that year.
Nationally, the average college student graduating in 2010 with outstanding loans carried $25,250 in debt.
Rob Brown, director of the grassroots organization Opportunity Maine, which is involved in education issues, said Maine has more first-generation college students than other states. And while some private colleges in the state have sizable financial aid programs, other relatively expensive colleges do not offer adequate financial assistance, Brown said.
Brown said he doesn't place much stock in the supposed agreement on interest rates until the Republican-controlled House votes.
"The other thing about this that is frustrating is how narrow the debate is," Brown said. "The attitude you get out of Washington is keeping the interest rate at 3.4 percent is the end-all be-all and if they deal with that, everybody will be fine."
Gianna Marrs, interim director of student financial aid at the University of Maine at Orono, said her office has been advising students about the potential rate increase and posted several links on the office's website. As for the wider debate over student debt, Marrs said her staff is trying to ensure that students fully understand their financing options and borrow only what they need.
"We tell students that what you borrow now is going to affect your salary" after graduation, Marrs said.
As of Wednesday, congressional leaders planned to attach the interest rate fix to a two-year federal transportation bill that will keep federal funding flowing for highway projects beyond Saturday. The last federal surface transportation project authorization bill expired two years ago, and Congress has been authorizing temporary extensions ever since.
Ted Talbot, spokesman for the Maine Department of Transportation, said the continuing uncertainty affects that state's ability to make long-term plans which, in turn, affects the businesses that perform the work.
"We would like to be able to tell our contractors that we have some long-term plans and that they can count on it," Talbot said.
Staff Writer Kevin Miller can be contacted at 249-8511 or at: