On April 10, an event jointly organized by the student interest group CALPIRG (California Public Interest Research Group) and ASUCD was held on the Quad at 11 a.m. to raise awareness about a proposed doubling of student loan interest rates on July 1.
The increase would be on the Subsidized Stafford Loan, a popular federal student loan that serves 45 percent of the UC Davis community. Currently, the Stafford Loan has an annual interest rate of 3.4 percent; however, if the increase goes through, the interest rate would increase to 6.8 percent.
Last year, the U.S. government made the decision to double the Stafford Loan interest rate in order to reduce the country’s national deficit. Action from CALPIRG and other student organizations convinced the government to put off the doubling of the loan for a year, but the deadline is approaching this summer.
Over 9 million students across the country have taken out Subsidized Stafford Loans to pay for their education, and three fourths of them have a family income of under $60,000. The average student loan debt is about $27,000 a year.
“These costs would be too much for students and families,” said Edson Perez, chapter chair of UC Davis CALPIRG. “Especially now, with people coming out as an undergrad are finding it pretty hard to find a job.”
The event at UC Davis was only one part of a nationwide day of action, meant as a counterpoint to President Barack Obama’s proposed budget released the same day.
“This is actually a national campaign to show students across the country are being affected by this,” said ASUCD president Carly Sandstrom. “ASUCD and CALPIRG decided to collaborate on this because we are both for students. We need to find a bipartisan solution this year.”
Obama’s budget proposal would keep the Stafford Loan interest rate consistent for this year, but would increase the cost for student borrowers in the future.
“We’re here to react to President Obama’s budget. We are concerned that it does not do nearly enough to reduce student interest rates,” said Chris Ah San, CALPIRG campus organizer.
Students affected directly by these government decisions came out to the event to support CALPIRG.
“I’m out here to try to stop students’ interest rates from doubling,” said Lexi Farris, a fourth-year science and technology studies major. “I have student loans and it’s hard enough as it is. If interest rates double it may reduce the opportunities available to me.”
CALPIRG plans to organize petition drives and awareness-raising events in the future, increasing in frequency up to July 1. A kickoff event is planned on April 11 at 7 p.m. in Olson 261.
LAUREN MASCARENHAS and ROHIT RAVIKUMAR can be reached at firstname.lastname@example.org.