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Aug 08, 2013 11:16 AM EDT

Student Loan Interest Rate Bill Solves Small Portion of College Cost Problem

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Federally subsidized student loan interest rates may have gotten a makeover in a bipartisan bill recently, but that is only part of the issue for affording college, the Huffington Post reported.

Democrats largely wanted to keep student loan rates down, making them more affordable for all, while Republicans mostly wanted to tie them to the financial market rates. Only recently did the two sides come to an agreement to lock in the rates for a full academic year at a time, but still synch them with financial market rates.

Students for the 2013-2014 academic year will borrow at a 3.9 percent rate, but as the economy is expected to improve, those rates will go up gradually.

However, now that the rates of federally subsidized loans are sorted, there are still a plethora of issues making college un-affordable for middle and lower-class income students.

"The student loan interest rate debate has really been about ameliorating a small symptom of a much larger disease," said Michael Dannenberg, director of higher education policy at the Education Trust. "And the disease is that college costs too damn much."

Between the last two academic years, the average cost of a four-year institution increased by 6.7 percent and 7.4 percent at two-year schools, according to a report from the National Center for Education Statistics (NCES). Also on the rise is the cost of room and board and meal plans, usually mandatory for incoming freshman and other on-campus residents.

According to the NCES report, room and board cost more than $8,000 in additional fees for public institutions. Other costs, like transportation put that total up to nearly $10,000, which matches and sometimes exceeds the cost of the academic year itself.

The Human Services Resource Center (HSRC) is a student-initiated program at Oregon State University (OSU) meant to bring together and serve the school's low-income students.

"Not everybody could make ends meet ... and you can't be successful in school if you don't have access to even the most basic resources," program coordinator Claire Cady said.

There are other options for low-income students, such as food subsidies, food stamps and health insurance, but the HSRC has been one of the area's most effective and well-known emergency food banks.

"The number of people we serve has increased each year," said Lydia Elliott, OSU food pantry coordinator. "In the past year alone, we were able to serve 2,583 people from 1,083 households."

Matthew Segal, president of OurTime.org, an advocacy group for millennials, said colleges are not easy to "shop" for because of all the different costs and rates. The institutions themselves also do not offer statistics such as likelihood of employment upon graduation or average student debt.

Segal said that congressional fixation on student loan interest rates, "while important for future debt levels, is -- in contrast with the larger issue of college cost -- really a distraction."

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