Recent House budget cuts may seem like a valid tool to help the economy but many University of Memphis students feel that it is a Catch 22.
The Senate's new $12.7 billion student financial aid cuts, which were passed Wednesday, left U of M students with mixed emotions.
The new legislation will increase the amount students are able to borrow for school but raises and fix interest rates at 6.8 percent.
"I like the fact that we can get more money because my loans hardly cover my living expenses," said Leigha Cline, freshman business administration major. "But I don't like the fact that we don't have a choice in the interest rates."
Currently, student loan interest rates are 5.3 percent for Stafford loans and 6.1 percent for Federal PLUS loans. These rates are variable and can fluctuate between 5.3 and 8.25 percent annually.
According to recent statistics from the Office of Financial Aid, between fall 2005 and spring 2006 almost 16,000 undergraduate, graduate and law students received some sort of government aid.
"I think it's horrible. It's bad enough that we have to pay interest during the time we're in school, now they want to raise it," said Nakita Jones, sophomore biology major.
Students aren't the only ones who will feel the effects of the new budget cuts. Medicare will be cut $5 billion and Medicaid will see an $8 billion cut. Child support enforcement and welfare will also be effected.
According to recent news reports, supporters of the bill believe it provides much-needed fiscal restraint while the nation tries to deal with the demands on the treasury by the costs of the Hurricane Katrina response and the war in Iraq.
The bill's opponents argue that the bill takes most of its savings from cuts to needy students and the poor.
"I can understand that the government has to sacrifice somewhere but financial aid shouldn't be it," said Samuel Culbreath, senior interdisciplinary studies student.
The current interest rates will remain in place until June 30.
"This goes against what government is about," Jones said. "They're trying to take money from anywhere they can instead of taking from themselves."
