Affordability has been a topic of discussion everywhere on campus this year — from the protests in board room meetings to the pragmatic discussions between student groups.
But this time that familiar topic will be addressed before the University community by the president of the United States himself.
Today, President Barack Obama plans to speak on a pressing topic for students nationwide: federal loans to pay for college.
More than seven million students in the country have loans with interest rates that will double in July, but Obama is pushing Congress to stall the increase.
His two-day tour with stops at UNC, the University of Colorado at Boulder and the University of Iowa will campaign to extend legislation that lowered interest rates for student loans in the past four years. Without the extension, the rates will revert to 2008’s levels — twice today’s rate of 3.4 percent.
On the national level, student debt has reached $1 trillion this year, outpacing credit card debt among young adults.
But rates of student debt at UNC are significantly lower than many of its peer institutions. Fewer UNC students borrow money from the federal government than the national average. Only one-third of UNC students use federal loans to pay for college.
With tuition rising at institutions around the country and in the UNC system, more students are looking to loans, said Steven Brooks, executive director for the N.C. State Education Assistance Authority.
“Loans are necessary,” he said. “The cheaper, the better.”
Shirley Ort, UNC’s associate provost for scholarships and student aid, said she supports the rate extension, but she doesn’t know that the measure is sustainable in the long term.
The legislation lowering rates, the 2007 College Cost Reduction and Access Act, passed with large bipartisan support five years ago. In the U.S. House of Representatives, 77 Republicans voted for the law, and most of them were re-elected.
But extending the existing law has proved more controversial, partly because of its cost — estimated at about $6 billion a year, according to the Congressional Budget Office.
“The president is trying to go around Congress and go to voters to see if he can develop some sort of pushback pressure on Congress,” said Ferrel Guillory, a UNC journalism professor and expert on Southern politics.
And the chosen college campuses, all in swing states, could provide an added bonus in November.
Young voters were a strong base for Obama in 2008, so some critics are saying the timing of the law’s expiration was a political move to boost youth support.
The issue also fits the image Obama has tried to project as a force of progress being stalled by the Republican Congress, Guillory said.
“It’ll be good for the campaign, but there is also a substantive issue here,” he said.
Also a point of contention is the source of the funding for the extension, which the Obama administration has not announced.
It could come from a tax proposal, an unpopular point for Republicans, or possibly from other Pell programs, which has raised concern among some expected supporters.
The low rate only applies to subsidized Stafford loans, used mainly by middle-class students, while nonsubsidized loans for lower-income students are not affected by the legislation either way.
The UNC system will not form a position on the issue until they know how it will be funded and how it will affect other students’ loans or grants, said Karen Regan, interim director for UNC’s Office of Federal Affairs.
“We want our graduates to have as little debt as possible — especially when student borrowing is at an all-time high,” Regan said. “The interest rate reduction is one way to accomplish this, but we’d never want to take action at the expense of other higher education financial aid programs.”
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