May 28, 2013
On May 8, 2013, Senator Warren (D-MA) introduced the Bank on Students Loan Fairness Act, S.897. This act would prevent the doubling of the interest rate for federal subsidized student loans for the 2013-14 academic year. The interest rate on federal subsidized Stafford loans is set to increase from 3.4 percent to 6.8 percent on July 1, 2013, which will result in increased payments for millions of college students. S. 897 would provide a one-year fix to the impending interest rate hike by setting the rate for federal subsidized Stafford loans at the primary interest rate offered through the Federal Reserve discount. The Federal Reserve would make funds available to the Department of Education to support these loans. The federal subsidized loan program would continue to be administered in the same manner it currently is by the Department of Education.
According to New York Federal Reserve, total educational debt in the United States has surpassed credit card debt and totals nearly $1 trillion. This year, on the backs of college students, the federal government will make $34 billion on student loans. Rather than adjusting the interest rate of big banks, which is less than one percent, Congress will make its revenue from the pockets of students.
The issue of student loan debt is of particular interest and concern of the social work profession. Social work education debt is untenable. The Department of Education states that 72 percent of students graduating from MSW programs incurred debt to earn their degree and that the average debt was approximately $35,500. Repayment is particularly challenging for social workers, whose salaries continue to lag behind similar professions such as nursing. According to a 2006 study by the NASW Center for Workforce Studies, median salaries of social workers range from a high of $55,129 among those working both full-time and part-time social worker jobs, to a low of $24,067 among those working only part-time social work jobs.
The combination of high educational debt and low salaries puts the profession at-risk as it seeks to serve the nation’s most vulnerable. If action is not taken to stop the doubling of the federal subsidized Stafford loans, college students, and in particular social workers, will bear the unnecessary burden of increased monthly payments.
Please contact your Senators today. Tell them to support college students and co-sponsor S. 897, Bank on Students Loan Fairness Act.