Wonky Wednesday: Why the student loan rate hike is an lgbt issue
By Daniel Pino, Task Force Conference and Meetings Manager
This Monday, student loan interest rates doubled because of a lack of action by the U.S. Congress. As of July 1st 2013, any new subsidized Stafford loan will be charged an interest rate of 6.8%—a 100% increase from any loans withdrawn even a day earlier when the previous rate was 3.4%.
Monday’s rate increase proves troubling for both current and prospective college students. With interest rates doubling to a whopping 6.8% coupled with already exorbitant tuition fees, students dependent on financial aid face potential life-long debt and the current economic prospects for young people don’t curb their fiscal anxieties.
While increased interest rates and unaffordable tuition fees are alarming, they are not the only troubling developments facing the economic security of young people. According to the Bureau of Labor Statistics, youth unemployment for those ages 16-24 was 16.1% in April 2013 and for those ages 20-24 it was 13.1%, compared to an overall unemployment rate in the same month of 7.5%.
So what does this mean for the typical student hoping to graduate college and find a job after four (or more) years of continuing education? According to data compiled in April 2013 by the National Association of Colleges and Employers the average starting annual income of college graduates with a B.A. was an estimated $45,000.00 (with those in the Humanities making considerably less than those in fields such as Engineering). While that income might seem reasonable, when you consider the increasing costs of living, escalating health care costs and diminishing job market it’s actually rather bleak. Add Congress’s inaction on skyrocketing student loan rates into the mix and the economic picture for young people is one that’s not getting better anytime soon.
LGBT people in particular should be outraged.
Recently, we have seen important gains for LGBT people, most notably in the Supreme Court’s striking down DOMA which among other things allows children of same-sex partners to list both parents on their Free Application for Federal Student Aid (FAFSA) form. But LGBT young people continue to face significant barriers to accessing affordable jobs, health insurance, and higher education, and these important wins still leave a lot of work to be done.
There’s also the issue of LGBT bias and employment protections. If a young person is lucky enough to get into an affordable college, graduate and secure a job with a good salary and benefits, they may still have to worry about the fact that in 29 states they can be fired for being lesbian, gay or bisexual and in 34 they can be fired for being transgender. With more and more young people coming out as LGBT in colleges and the majority of states allowing people to be fired or not hired on the basis of their sexual orientation and gender identity or expression, young people face even greater barriers to achieving and maintaining employment that will help them reach their economic potential and repay their loans regardless of the high interest rates.
I don’t need to tell you that its financially hard out there for young people and even harder still for LGBT youth – nor do I need to remind you all that the issues facing LGBT college students encapsulate the overwhelming needs of queer young people. These are things that our community knows all too well. But it’s important to remember that while we have won some excellent victories recently, we must realize that there is infinite work to be done to realize the full economic security of all members of our community – regardless of their ages.