Poll: Stafford loan interest rate increase, students consider cheaper education alternatives

Unless Congress acts quickly to stop it from doubling, the federal subsidized Stafford loan interest rate is scheduled to revert back to 6.8 percent on July 1 from the current 3.4 percent, affecting millions of students across America.

Effects on college students

In an effort to better understand how current students would react to this change, we at CengageBrain.com, the premier destination for purchasing discount college textbooks and part of Cengage Learning, polled 500 college students on everything from the drastic actions they would take if rates increase, to how it might affect their voting in upcoming elections. Shockingly, 23 percent of the students we polled said that they would consider dropping out of their school if rates doubled, and 66 percent of students that were planning on getting an advanced degree said they would be less able to pursue graduate school. And, the effects don’t stop there.

Check out our infographic for the complete results on how increased student loan rates would impact students’ education.

Students Weigh in on Student Loans Debate

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According to a May 2, 2012, article from The Examiner, “Fixing the problems in student lending” by Phil Roe and Tim Walberg, the interest rate on student loans has been a decades-long debate. “They were switched to a variable rate in 1992. Congress later voted, in 2002, to set them back at a fixed rate of 6.8 percent beginning in July 2006. In 2007, Democrats chose to temporarily phase down the subsidized Stafford loan interest rate until it reached 3.4 percent last July.” Though the 3.4 percent rates were not intended to be permanent, a doubled interest rate would still severely impact students.

Community college students

Our results showed that students from community colleges were the most likely to alter their education plans.

If interest rates rise to 6.8 percent:

  • 21 percent would consider dropping out of their school.
  • 62 percent would be less able to pursue an advanced degree.
  • 31 percent would not feel the need to choose any cheaper alternatives.
  • 58 percent are likely to have their voting affected in upcoming elections.

Public university students

Public university students from our poll proved to be the most likely to have their voting affected by the student loans debate.

  • 23 percent would consider dropping out of their school.
  • 71 percent would be less able to pursue an advanced degree.
  • 36 percent would not feel the need to choose any cheaper alternatives.
  • 64 percent are likely to have their voting affected in upcoming elections.

Private university students

Out of all three types of colleges polled, private university students were the most likely to take action by contacting their congressional representative or the president.

  • 30 percent would consider dropping out of their school.
  • 64 percent would be less able to pursue an advanced degree.
  • 38 percent would not feel the need to choose any cheaper alternatives.
  • 61 percent are likely to have their voting affected by the student loans debate.

Taking action

For many students, the issue of student loans ranks on a very similar level of importance as high unemployment rates. While only 13 percent had already contacted a political representative, it appears that politicians can expect to hear from these students come election time. When asked if the student loan debate will ultimately affect their voting in upcoming presidential and state elections, 61% of the total students said yes. Only 10 percent of respondents reported they were not planning to vote.

If you haven’t done so yet, get involved with the student loans debate and make your voice heard by contacting your representatives. To learn who your district representative is and how to contact them, visit House.gov.

Tell us in the comments:
How would increased student loan interest rates affect your education choices?

Posted in Loans and scholarships, Money & finance | Tagged , , , , | 2 Comments

2 Responses to Poll: Stafford loan interest rate increase, students consider cheaper education alternatives

  1. Daniel says:

    Out students are not very well informed then.

    Dropping out of school over this would be really stupid. Because the 3.4 percent rate applied only to Subsidized Stafford loans issued to undergraduate students for the 2011-12 school year, the agreement doesn’t save students very much money. All Stafford loans issued before 2011 carry higher rates. The agreement only extended the 3.4 rate another year. The 3.4 percent extension saves students at most $9 a month. The average is $6.

  2. James hart says:

    It seems to me they’re making it harder for people trying to upgrade their professional worth, by returning to college and attain skills that would allow them to compete for gainful employment.
    Knowing the diasaterous economy policies of George Bush and associates, people were encouraged to seek the skills that would be condusive to employers needs, and now that alot of us took that iniative, they cut the resources vital to an already strapped group of students seeking to better their live’s , and over-all economic situation.

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