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Call for student debt relief is warranted

By Staff | May 1, 2013

The average college graduate entered a tight job market in 2011 owing $26,600 in student loans – the most since the start of keeping records in 2005. In New Hampshire, the situation was considerably worse with the average graduate owing $32,440, the highest in the country and 22 percent greater than the national average.

The high cost of upper education is a damper on the economy. Not only do high debt levels restrain people’s ability to fully participate in the economy, but they also make it more difficult for students to complete their educational pursuits.

The situation will become worse July 1 when the interest rate on government-subsidized Stafford loans doubles from 3.4 percent to 6.8 percent. This will cause significant hardship for millions of graduates struggling to become productive members of society.

The increase has merit. It was estimated in 2010 it costs the federal government $12 for every $100 students borrow. That adds up to a huge chunk of money at a time when the country needs to close the federal budget deficit and contain the national debt. Still, that benefit must be weighed against the negative effects on people’s lives and the economy.

U.S. Rep. Ann McLane Kuster, D-N.H., proposes a reasonable compromise with legislation that would extend the low interest rate for two years. She reasonably concludes that “at a time when a college education has never been more important or expensive, the last thing Congress should do is make it even harder for students to pay for their education.”

The measure is not a solution but temporary relief to give the educational system and government more time to address the underlying causes of the burgeoning cost of higher education.

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