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SA runoff, John Richardson

Student Association President John Richardson signed a petition Tuesday to ask Congress to stop the interest rate on Stafford loans from doubling this summer. Hatchet File Photo

The Student Association’s leader signed a petition Tuesday calling for Congress to address mounting student loan debt.

President John Richardson was one of 200 student government leaders from colleges nationwide to sign the letter urging congressional leaders to pass legislation that would prevent the 3.4 percent interest rate on Stafford loans from doubling this summer.

He said the petition was “in line with the work that I’ve been trying to do all year to keep cost of attendance down.”

The letter discusses the growing concern among students about the cost of higher education, highlighting that one out of every two graduating students are unemployed or employed at a job for which they are over-qualified.

“There has long been a promise that, if a student goes to college, works hard, and does well, they will have a more prosperous future ahead of them,” the letter reads. “Student loan debt is severely undermining that prospect.”

GW students typically graduate with about $32,500 in debt – higher than the average of $25,250 that 2010 college graduates accrued, according to the most recent data available from the Project on Student Debt.

“I’m not sure how many of our grads have jobs yet, but no one wants to have this much debt,” Richardson said.

The National Campus Leadership Council, a coalition of student government presidents from across the country, spearheaded the push for signatures.

Representatives from Georgetown, American, Howard and Catholic universities also signed the petition.

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Director of the Consumer Financial Protection Bureau said the new website would better inform prospective college students of the financial implications of their decisions. Photo used under the Creative Commons License.

Federal efforts to demystify the cost of college moved forward today with the release of an online college comparison shopper.

The Consumer Financial Protection Bureau launched the Financial Aid Comparison Shopper to allow prospective students to to compare the financial implications of attendance at institutions where they were accepted. The effort is another step in a series of federal programs to break down universities’ sticker prices and financial aid packages.

The website allows students to enter up to three colleges, then spits out the sticker price, average scholarship package and estimated monthly loan payments at each, with an option to input the user’s exact financial aid offer. It also provides the same information for the average public and private universities as additional points of comparison.

The tool will not estimate total debt burden upon graduation, according to its website.

Student loan debt nationwide likely crossed the $1 trillion threshold late last year, although revised estimates only acknowledged the mile marker last month, the Wall Street Journal reported March 22. Many have since warned that the student debt bubble could be an impediment to overall economic recovery, preventing college-aged borrowers from being able to afford a home or qualify for a mortgage.

The average graduate left college with $25,250 in student loan debt in 2010, according to the most recent data from The Project on Student Debt – a figure the typical GW student topped by more than $7,000.

“Now more than ever, students and their families need to know before they owe. Our Financial Aid Comparison Shopper helps students make apples to apples comparisons of their offers and pick the one that works best for their financial future,” Richard Cordray, the bureau’s director, said in a release.

The new website is part of the “Know Before You Owe” campaign, which was first announced in November. The bureau opened in 2011 in response to the economic crisis.

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President Barack Obama, HIV, AIDS

President Barack Obama addressed college affordability and access in his third State of the Union address Tuesday. Hatchet File Photo

This blog post was written by Hatchet Reporter Mary-Ellen McIntire.

President Barack Obama emphasized the importance of education in solving the nation’s challenges in his third State of the Union address Tuesday.

Obama also noted the rising cost of college attendance and called on lawmakers to provide financial relief to students.

He urged Congress to stop interest rates on student loans from doubling, as they are set to do in July, and to permanently extend the tuition tax credit his administration created.

The president also called on Congress to double the number of Federal Work Study jobs in the United States over the next five years. GW faced $400,000 in federal funding cuts for work-study positions last semester, forcing departments to pay a higher percentage of student salaries – a unique move as peer universities chose instead to slash the number of  jobs available.

“States also need to do their part by making higher education a higher priority in their budgets,” Obama said.

He called on colleges and universities to keep tuition costs down, warning, “If you can’t stop tuition from going up, the funding you get from taxpayers will go down.”

Obama said he has met with a group of college presidents whose schools had successfully lowered tuition. Some colleges redesigned courses to help students graduate quicker, he said.

Students opting to save money by cutting their final semester has been a trend at GW, although statistics are not available because the University does not officially track students who leave a semester early.

“Higher education can’t be a luxury,” Obama said. “It is an economic imperative that every family in America should be able to afford.”

Obama also addressed the importance of pre-college education.

While tight budgets have forced states to fire thousands of public school teachers, Obama said that a good teacher can increase the lifetime income of students.

“Give them the resources to keep good teachers on the job, and reward the best ones. And in return, grant schools flexibility: to teach with creativity and passion; to stop teaching to the test; and to replace teachers who just aren’t helping kids learn.”

Obama also proposed that every state require all students to stay in high school until graduation or until they turn 18 years old.

“When students are not allowed to drop out, they do better,” Obama said.

The emphasis on education policy in the national address is a continuation of Obama’s “We Can’t Wait” campaign. Launched last October to address student debt, University administrators said few GW students would benefit from the plan.

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The debt deal passed by Congress and signed into law today will step up Pell Grant funding in exchange for putting federally subsidized loans for graduate students on the chopping block.

The Budget Control Act of 2011 will not touch President Barack Obama’s $5,550 maximum Pell Grant award per undergraduate student and pours $17 billion into the program’s funding by 2015, but cuts the federal subsidy that previously reprieved graduate students from accruing interest on their loans while still in school.

About 11 to 12 percent of GW undergraduates receive Pell Grant awards in their financial aid packages. Associate Vice President for Financial Assistance Dan Small said in February more than 1,390 students received Pell Grants this year.

Congressional Budget Office estimates show the new measures will boost direct spending by $7.4 billion over the next four years but ultimately reduce spending by $4.6 billion by 2021.

Beginning July 2012,  graduate students with subsidized loans will not receive subsidies on their interest, making the students accountable for interest that builds up while they are in school to trim government spending by about $21.6 billion by 2021, according to the CBO. The bill also prevents the Department of Education from incentivizing on-time repayment of loans through programs, such as one that offers partial rebates for certain fees students incur during the loan process.

Graduate students who make payments automatically debited from their bank accounts will still receive interest rate reductions.

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