For someone with a $100,000 in college loans, there’s at least another $40,000 in interest fees. Just think what could be done if that interest amount was lower.
You could use it to put toward your children’s higher education, invest in property or purchase a car.
On Nov. 18 Castleton State College Student Government Association President Timothy Mackintosh approached the Vermont State College Students Association with the idea of writing a petition asking to lower student interest rates to 1 percent.
They loved the idea and decided they would like to take it back to their colleges and spread the word.
“I can buy a car and the interest would be 1.9 percent and my education is 6.8 percent,” Mackintosh said, clearly outraged by the current student interest rate.
Mackintosh said the interest rates vary between state and family situations like when parents with good credit put students loans in their name, but he said Vermont State College Association said their average interest was 6.8 percent.
The interest rates are so high because of risk factors Mackintosh said, but the federal government says you can never forfeit on a loan so the risk factor is 0.
Private loan companies usually charge about 8 percent interest so if the government lowered their interest rates, than these companies would have to do the same to maintain business.
“I don’t think the government should tax you on the want to better yourself,” Mackintosh said. “New citizens from 18 to 23 years old; taxing them right off the bat cripples them forever.”
Mackintosh has been reaching out to other colleges across the country and large companies with a high social media followings to post the petition on their websites in hopes getting more people to sign it.
There are approximately 16,000 students in Vermont State Colleges and the goal for the petition is to get about 10,000 signatures. Mackintosh thinks this will be a credible amount to present to state senators.
“Interest rates on loans have a huge effect on personal budgets after students leave college, so I would support anything the federal government can do to reduce these rates,” Castleton President Dave Wolk said. “It would make a significant difference for students who have worked hard in college and thereafter, and they deserve the help.”
Students think this is an important petition to sign and to pass.
“My future depends on financial stability,” Colin Santee, of Johnson, VT, said on the petition site. “Lowering the interest rates will most likely allow for that.”
When all is said and done, if the politicians decide to take the petition to the next level, the recognition of its foundation will root back to Castleton.
“I was originally just going to do it for Vermont,” Mackintosh said. “If it becomes a national thing they will look back at who started it and it will have been Castleton.”
The petition can be signed at http://www.change.org/petitions/the-united-states-congress-lower-student-loan-interest-rate-to-1#share.