Report:

Student Loan Debt in Florida

Released by: Florida PIRG

Student Loan Interest Rates Set to Double   

Without a new plan, on July 1 the interest rate on subsidized Stafford student loans will double, from 3.4 percent to 6.8 percent.  A 2007 college affordability plan lowered the rate, but expired in 2012.  Last year, President Obama and Congress extended the low rate for one year. 

In Florida, 462,048 federal student loan borrowers will be impacted[1].

Student Borrowing in Florida  

51 percent of Florida’s graduates carry student debt, with an average of $23,054 in debt per borrower[2].  Unfortunately, student loan borrowers in Florida will be hit with higher cost loans on July 1, which translates into an additional $936 in cost per loan, per year[3]

Meanwhile, as students are struggling with high costs, the federal government is collecting massive, shortsighted revenues from student loan borrowers – projected at $50 billion for next year alone[4].

Student Debt and Its Impact on the Economy  

Last April, at $1 trillion, student loan debt surpassed credit card debt as the top form of consumer debt across the country[5].  Such significant debt has serious implications for the economy, in Florida and elsewhere.  For instance, if the low rate were extended, student loan borrowers would save $432,476,928 that could be spent in the consumer economy rather than being applied toward paying down debt.

Strengthening the Florida Job Market  

The Florida job market is experiencing a skills gap between the number of people without jobs and the skills employers are looking for in their employees.  By 2020, 63 percent of the jobs in the state will require a certificate or degree, while only 35 percent of the current population has one[6].  Keeping the interest rate low on student loans will send an urgent signal to students, workers, and the unemployed to get the postsecondary training needed to adapt to new economic realities.

Florida’s Senators

Senator Nelson and Rubio have different records when it comes to supporting students and the economy in Florida.  Senator Nelson backed the College Cost Reduction and Access Act of 2007, which set the lower interest rate[7].  Last year, he supported both the first rate extension plan[8] and the final plan[9].  Senator Rubio did not support either plan last year.

 

 

[1] Analysis, U.S. Department of Education, 202-401-1576.

[2] “Student Debt and the Class of 2011,” The Institute for College Access & Success, http://projectonstudentdebt.org/files/pub/classof2011.pdf

[3] Analysis, U.S. Department of Education, 202-401-1576.

[4] Philip Elliott, “House Advances Student Loan Fix,” Associated Press, May 16, 2013, http://bigstory.ap.org/article/house-take-student-loan-fix.

[5] Tom Raum, “Recovery Threatened by Student Loan Debt,” Associated Press, April 3, 2012, http://www.boston.com/news/education/higher/articles/2012/04/03/recovery....

[6] “Florida Analysis 2011,” College Complete America, http://www.completecollege.org/docs/Florida.pdf.

[7] “Bill Summary and Status – 110th Congress (2007-2008) H.R. 2669,” Library of Congress, http://thomas.loc.gov/cgi-bin/bdquery/z?d110:H.R.2669:.

[8] “U.S. Senate Roll Call Votes, 112th Congress, S 2343,” United States Senate, http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm....

[9] “U.S. Senate Roll Call Votes, 112th Congress, S 1813,” United States Senate, http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm....

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