By Pamela Brogan
OUR CAPITOL BUREAU

WASHINGTON — The good news is that Congress has increased the opportunities for Americans to obtain student loans.

The bad news is those loans will be more expensive.

Despite rising tuition costs and mounting student debt, Congress has voted to raise interest rates on federal student loans at a time when many are struggling to pay off their debt. Even some members of Congress, who earn $165,200 a year, are still paying off student loans.

Student loans have become a major debt for many like Kevin Cross, 41, a student at Ozarks Technical Community College in Springfield.

Cross will graduate with a total debt of $20,000 from his current program and earlier college studies.

"I don't think it's fair," Cross said. "Congress should be looking at other areas to pay down the federal deficit instead of burdening students who are trying to start a life."

Cross is looking forward to a career in culinary arts and hospitality management but will begin his new job with significant debt.

"I need to get a high-paying job to pay off this debt," he said.

For graduating seniors, the average student debt is about $19,000, financial aid experts said. Graduate students have an average debt that ranges from $19,900 to $105,000 for medical students including college costs, according to the Department of Education.

At Missouri State University, students graduate with an average debt of $14,000. Nearly three out of four students get some kind of financial aid. Of those receiving financial aid, 98 percent get student loans, according to Vicki Mattocks, director of financial aid.

Mattocks said that by raising interest rates on federal student loans, Congress is looking at the program as a way to "make money rather than an investment in the future."

Instead, Mattocks said Congress should view the student loan program as a way to expand educational opportunities.

In July, interest rates on new federally backed student loans will be fixed at 6.8 percent as a result of the legislation Congress passed in February. Students now pay 4.7 percent in interest while in school and 5.3 percent after graduation, with an interest cap of 8.25 percent. Parents who pay their children's loans will pay a fixed rate of 8.5 percent, up from 6.1 percent. Overall, the bill reduced federal spending on student loans by about $12 billion, according to the Congressional Budget Office.

In addition to high debt, tuition costs have jumped by 32 percent at four-year private colleges over the past 10 years and 41 percent at public universities, according to the College Board. Average tuition, and room and board fees at private colleges are $29,000 this year and $12,000 at public universities.

Costs have risen 41 percent over the last four years at Missouri State. The total bill for students attending college next year is estimated at $14,400.

"It's somewhat disheartening that loans are more expensive and at the same time we're paying a lot more in tuition for school," said Robert Martin, 21, a junior at MSU who is a political science major. "I'd like to see Congress reconsider this legislation and lower interest rates for students."

By comparison, costs per credit hour at OTC are up to $78 this year from $56 four years ago, an 18 percent increase.

The Knox family in Madison, Wis., also is struggling to pay off their student loans.

Isadore Knox, 51, and his two daughters, Jennifer, 21, and Candace, 22, all have federal student loan debt. Isadore has three younger children who also might attend college.

"Congress should play an active role in making education less expensive," said Isadore Knox, a Dane County equal opportunity official. He has a $15,000 loan debt and said his two daughters already have combined debts of about $15,000 that is likely to increase before they graduate.

Isadore said he and his wife, a state probation officer, saved for their children's education but could not afford to pay for all their daughters' college expenses, despite their annual income of $135,000.

The rate increase might not be as much of a burden on congressional staff and federal employees as it could be on average Americans. That's because congressional aides can get up to $40,000 in loans repaid and federal workers up to $60,000. Lawmakers get no repayments.

"It must be a burden if Congress repays loans for their own staffers at taxpayer's expense," said Christyne Hesse, a senior at St. Cloud State University in Minnesota, who has $14,000 in debt. She said students are in a financial hole, and Congress could have helped them by lowering interest rates on student loans.

"Congress just handed us a shovel and said, 'Dig out,'" said Hesse, who is chairwoman of legislative affairs for her school's student government and is thinking about running for Congress some day.

College financial aid experts said students should consolidate variable rate loans before July 1 when the higher rates kick in.

"I'm looking at significant debt for a young person," said Jennifer Knox, a junior at the University of Wisconsin-Madison, "and even bigger debt if I go to graduate school."

Robert Shireman, founder of the Project on Student Debt, said that many students begin their careers "with a fair amount of debt that weighs heavily on them."

"For some it means they'll delay decisions about buying a home, car, saving for retirement or attending graduate school," Shireman said.

Rep. Cathy McMorris, R-Wash., said she voted with the GOP-majority for higher fixed rates as part of the deficit reduction bill because it also raised federal loan limits for undergraduates and graduate students.

"Overall, there's more opportunity for lower- and middle-income students" to get federal loans, said McMorris, a member of the House Education and the Workforce Committee.

The debate over student loans is personal for lawmakers like McMorris, and Linda Sanchez, D-Calif., who both have federal student loan debt.

McMorris has $16,000 in debts remaining on loans she used to pay for her master's degree in business administration from the University of Washington.

She said she is a strong supporter of student loans and is co-sponsoring legislation to retain funding for federal Perkins loans for low-income students that President Bush has proposed to eliminate in his 2007 budget.

Sanchez voted against the bill to increase interest rates on student loans because she said it represents "Congress' totally screwed up set of priorities" when student debt and tuition is increasing.

Sanchez still has to pay off about $45,000 remaining on loans she used to get her law degree at UCLA.

The daughter of immigrant parents, Sanchez said she had "no way" to attend law school without the help of federal grants and loans.

Sanchez said Congress is sending the wrong message to its constituents by not making college more affordable for all.

"Congress is saying: 'I've got mine, good luck to the rest of you,'" Sanchez said.
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Contact Pamela Brogan at pbrogan@gns.gannett.com.