As state treasurer, I have always advocated for saving for college. Since the 1998 launch of College Savings Iowa, Iowa’s 529 plan, my efforts in raising awareness about this important topic have only increased. For years I have worked to help families understand the value of saving for college now rather than borrowing when the time comes. While tens of thousands of families are saving through College Savings Iowa right here in Iowa, many still find themselves taking out student loans.
I recently had the opportunity to visit with President Obama when he was in Iowa over concerns with the potential interest rate hike for student loans. It became apparent as I was listening to him that the President and I share one very strong belief. We need to help young people and their families make college affordable.
The President wants Congress to pass legislation that will stop student loan interest rates from doubling on July 1, 2012. To better understand what this means for Iowa families, I did some math. The average amount Iowa students will borrow next year is just over $4,000. If the interest doubles, this will cost those students an extra $993 over the life of that loan. These students should not graduate from college with that extra burden.
My advice to families over the years has been to start saving early and to save regularly. Even a small amount of money, saved on a regular basis over an extended period of time, can grow into a substantial amount. Saving early may help reduce a family’s need to borrow to cover educational expenses, which will help parents – and their children – get through college with less debt. While my message is still the same, I don’t believe that families who have been unable to save enough should be penalized by having to pay more in student loan interest.
Since a college education is an investment that lasts a lifetime, we need to make sure that it is a good investment for our youth. I encourage all Iowans to ask Congress to support President Obama’s plan to keep student loan rates from doubling.