Archive for » March, 2013 «

Coastal Bend Business Datebook: 03.31.13


Tuesday

Doctor offers Alzheimer training

Dr. M. Retta Martin, owner of Home Instead Senior Care, will offer free training on “Dealing With Difficult Behaviors” for individuals who have Alzheimer’s and other related dementias. This is offered through the CARE series of Changing Aging through Resources and Education.

The training will be from 9:30 a.m. to 12:30 p.m. at Homewood Residence, 6410 Meadowvista Blvd. Seating is limited. Information/reservations: 814-3331.

Wednesday

SBA hosts women’s program seminar

The U.S. Small Business Administration will conduct a free seminar to explain the new Woman Owned Small Business (WOSB) Contracting Program to help women-owned small businesses in targeted industries compete for federal contracts.

The SBA loan program will also be discussed to assist small businesses with access to capital. The seminar is from 9 to 10:30 a.m. at the agency office, 3649 Leopard St., Suite 411. Seating is limited and seminar is subject to change.

Information/reservations: Elizabeth Soliz, 879-0017, ext. 301.

Thursday

Trash Summit hosts Thursday speakers

Trash Summit is from 8 a.m. to 1 p.m. at the Del Mar College Center for Economic Development, 3029 S. Staples St. Breakfast, networking and exhibits begin at 8:30 a.m. The event features guest speakers Anthony F. Amos, Christine Reiser and a panel discussion on oyster recycling with Theresa Finch and Jennifer Pollack. Lunch will be served. Free.

Information: 826-3673 or russelst@cctexas.com

SBA explains online application process

The U.S. Small Business Administration will conduct a free seminar to explain the 8(a) Business Development Program’s online application process for eligible small businesses. The 8(a) Business Development program is an agency program to help disadvantaged small businesses gain a foothold in government contracting opportunities.

The seminar is from 9 to 10:30 a.m. at the agency office, 3649 Leopard St., Suite 411. Seating is limited and the seminar is subject to change.

Information/reservations: Elizabeth Soliz, 879-0017, ext. 301.

Mirador hosts planning seminar

Mirador hosts a seminar on “Planning for Your Longevity: A Formula for Your Success” from 11 a.m. to 1 p.m. at Mirador, 5857 Timbergate Drive. Guest speaker will be Randalynn Kaye, who has helped hundreds of people plan for their security and well-being. Lunch will be served.

Seating is limited. Information/reservations: 288-7027.

FRIDAY

SBA explains business program

The U.S. Small Business Administration will conduct a free seminar to explain the 8(a) Business Development program eligibility for small businesses seeking federal government contracts. The 8(a) Business Development Program provides business assistance for small disadvantaged businesses compete in the marketplace. Prerequisites include at least 2 years in business, a product or service to sell to federal agencies, registration in GSA’s System for Awards Management (SAM) database and a DUNS number.

The seminar is from 9 to 10:30 a.m. at the agency office, 3649 Leopard St., Suite 411. Seating is limited and seminar is subject to change.

Information/reservations: Elizabeth Soliz, 879-0017, ext. 301.

later

AAF-CC schedules April 9 meeting

The American Advertising Federation-Corpus Christi Chapter has rescheduled Paul Weyland, president of Austin-based Paul Weyland Communication Strategies to speak during the club’s April 9 meeting. The broadcast sales expert will cover how to take control of the front-end of the local direct sale (the creative idea) and the back-end, asking for and getting an annual commitment from clients.

The meeting is at the Corpus Christi Town Club in One Shoreline Plaza, 800 N. Shoreline Blvd. Reservations are required by April 8. Lunch is free for AAF-CC members, $25/nonmembers and $15 for college/university students (payable at the door). Information: lauren.clayton@twcable.com.

Women discuss workplace equity

YWCA Equal Pay Day Symposium is from 7 a.m. to 1 p.m. April 9 at 4601 Corona Drive. Free to first 45 registrants.

The symposium features several speakers from the community and discussion on solutions to closing the wage gap. Information: devywca@ywcacc.org or 857-5661, ext. 17.

Encouraging entrepreneurship for 50 and older

The U.S. Small Business Administration will host a free event encouraging entrepreneurship for those 50 years old and older. The event will feature a panel of successful small business owners sharing their stories and challenges. The SBA will participate with SCORE Corpus Christi and Del Mar College Small Business Development Center to explain their available resources to help small businesses start, grow and succeed.

The seminar is from 11:30 a.m. to 1:30 p.m. April 11 at the Del Mar College Center of Economic Development, 3209 S. Staples St., Room 167. Seating is limited and seminar is subject to change. Must register to receive free lunch.

Information/reservations: Elizabeth Soliz, 879-0017, ext. 301.

Sisters on Saturday seminar set for April

The annual Sisters On a Saturday “S.O.S.” business and professional development seminar/luncheon “Empowering Women to Excel … In Mind, Body and Spirit” is from 10:30 a.m. to 2:30 p.m. April 20 at the Holiday Inn-Airport, 5549 Leopard St.

Former Miss America 2004 Ericka Dunlap will be guest speaker. Cost: $40/sponsorships available. Information: 815-3099, 877-3634 or 361-779-5656.

Rotary Club hosts administrative day

Rotary Club of Southside Corpus Christi celebrates Administrative Professionals Day with a luncheon at noon April 24 at the Corpus Christi Country Club, 6300 Everhart Road.

Guest speaker is Kelly Quintanilla, dean of the College of Liberal Arts at Texas AM University-Corpus Christi.

Cost: $35; $60 for two. All reservations must be paid in advance by April 20. There will be no meal tickets at the door the day of the event.

Information/reservations: www.southsidecorpuschristi.rotary5930.org or call Matt Beavers, 993-6902 or email whittmb@aol.com.

Accountants host April 26 luncheon

Corpus Christi Chapter of the Texas Society of Certified Public Accounts will host a luncheon featuring a presentation on “What CPAs Need to Know About the city of Corpus Christi” by Mayor Nelda Martinez. Registration opens at 11:30 a.m. April 26 at the Omni Bayfront Hotel. Cost: $22/before April 19, $24/at the door.

Information: corpuschristi.tscpa.org or call 800-428-0272, ext. 279.

Public accountants host conference

Texas Society of Certified Public Accounts host “Technology Essentials for Today’s CPA” conference April 26 at the Omni Bayfront. Registration opens at 8 a.m.

Cost/registration: $285 for TSCPA members and non-CPA staff of members; $410/nonmembers.

Information: corpuschristi.tscpa.org or call 800-428-0272, ext. 279.

Debt risks ministry careers

Tuesday mornings tend to find Kyle Verage, his wife, Grace, and their 9-month-old son, Peter, grocery shopping at a free food pantry on the campus of Fort Wayne’s Concordia Theological Seminary.

Kyle is in his last year of studying at the seminary to become an ordained minister in the Lutheran Church-Missouri Synod.

Verage has an on-campus work-study job, and his wife works part time as a seamstress. But money is tight, he says.

Between loans for his and his wife’s undergraduate degrees from Valparaiso University and his seminary training, he figures the couple is about $75,000 in debt.

“Our plan is to continue to live as we’re living now. We live meagerly – very meagerly,” he says. “And we will devote as big a chunk of money from my salary and Grace’s to student loans to pay them back as soon as possible, ideally within eight to 10 years.”

But, Verage, 26, adds of the debt: “It seems to us right now just an insurmountable amount of money.”

Nonetheless, the Verages’ situation is about average for many of today’s ministers-to-be, national and Fort Wayne-area church leaders say.

It’s a situation that has broad impacts not only on ministerial candidates and their families but also on congregations and denominations as a whole, as ministers struggle to pay back amounts that far exceed median salaries of $41,000 nationally. In the Fort Wayne area, the average salary for pastors is about $36,000 to $39,000 a year.

An oft-cited study from 2005 by researchers from Auburn Theological Seminary calls theological graduates’ debt “a gathering storm that threatens the next generation of clergy and lay church professionals.”

The study uses data from 2001, when about 20 percent of graduates had borrowed more than $30,000. But an updated, soon-to-be-released edition from 2011 finds that more students are borrowing, and there has been an “alarming” rise in individual debt, according to one study author, Sharon Miller, quoted last year in an online article for the Association of Religion Data Archives.

Some local church leaders are inclined to agree.

“Yes, guys have always come out of seminary and college with debt, but education costs have risen so much lately that it’s kind of snuck up on denominations,” says the Rev. Steve Jones of Fort Wayne.

Jones is central region director for The Missionary Church, a Fort Wayne-headquartered Protestant denomination with about 500 congregations nationwide.

“We have guys coming out of seminary with $50,000 or $60,000 in debt,” he says. “It’s not like a pre-med guy who says, ‘It’s only a matter of time before I’ll be making a lot of money.’ These (ministerial) guys are intelligent, they’re passionate and they’re very articulate. But they don’t know how to handle the debt. It’s just a lingering load on them.”

The Rev. Bill Hossler of Fort Wayne, national president of The Missionary Church Inc., says more of the denomination’s pastors are finding they must become bi-vocational – meaning that they need “a regular job” in addition to their ministerial work.

“They have to find a job somewhere in the secular market, so they can do what they want to do, which is being engaged in ministry,” he says. “And we’re finding in many cases it (debt) hinders where they can actually serve.”

That’s because a pastor with a tenuous financial situation generally must seek out a position as an assistant or associate pastor in a large congregation, Hossler explains. That leaves smaller congregations, often rural or in the inner city, with vacant pulpits or staffed only on a part-time or interim basis.

In the Presbyterian Church USA, says the Rev. Arianne Lehn, who is associate pastor with her husband, the Rev. Jeffrey Lehn, at Fort Wayne’s First Presbyterian Church, seminary students aren’t automatically placed by the denomination.

“A number of at least Presbyterian seminary students have trouble finding positions after graduation, so there is not the immediate assurance of having the ability to pay back loans once graduation happens,” she says.

“Some of the seminaries are really doing their best with what they have to help students with the financial burden, but it’s still an obstacle and a barrier for a number of students.”

Indeed, experts say, some denominations are finding that finances are changing the kind of people going into ministry – with more older candidates seeking ordination as a second career after they’ve earned and saved enough to pay for school or to take a lower starting salary.

For similar reasons, in denominations that allow women to be ordained, more candidates are women who are part of a two-earner family. In other denominations, more wives of clergy with debt must work, which cuts into time they traditionally would have devoted to the church.

The Missionary Church’s Jones says an unappreciated impact is on the mission field, where that denomination has about 15,000 congregations.

Pastors with a high debt load, he explains, are ineligible to serve abroad, because it’s too difficult for them to raise a salary high enough to cover living expenses and U.S. obligations in remote locations or underdeveloped countries.

“Many of our potential missionaries just hit a wall,” he says.

Although denominations with less strict educational qualifications may be less affected by the financial situation of potential pastors, few denominations are unaffected.

Even Roman Catholics, whose priests, brothers and religious women take vows of poverty, have felt the pinch of student debt.

A study last year found that some candidates for religious life were being turned down because they had too much undergraduate loan debt. Seven in 10 religious institutes surveyed turned away at least one person because of educational debt, the study for the Chicago-based National Religious Vocation Council found.

And, many communities asked young people to delay applying because of debt. The reason is that nearly half – 42 percent – traditionally assumed at least some of the educational debt of those entering.

About one in three of the 15,000 serious inquiries made in the previous 10 years had educational debt in excess of $28,000, about $3,000 more than the national average, the study found.

In an era with a well-documented shortage of priests, the situation led study authors to comment that some debt-laden candidates “are too poor to take the vow of poverty.”

The Rev. Mark Sheafer, Concordia’s director of admissions and financial aid, says seminaries are beginning to tackle the debt issue.

About 90 percent of Concordia students end up borrowing through federal student loans, he estimates.

In December, Sheafer says, Concordia received a grant from the Indianapolis-based Eli Lilly Foundation, which supports study of religion, education and community development issues, to document the debt situation among students and recent graduates.

Already the seminary provides, through donations and an endowment, up to a 50 percent reduction in tuition based on financial need. And, the seminary’s ministerial candidates’ expenses are cut somewhat in their third year, when they are assigned to a vicarage. It’s a sort of ministerial internship, in which the church to which they are assigned pays a salary and provides housing.

Recent graduates are also eligible for new federal repayment programs that allow reduced payments based on income, debt load and family size, Sheafer says.

Concordia also has developed a program that shortens the traditional four-year route to ministry by a year and has more online courses. Plus, some congregations may agree to pay part of new minister’s educational expenses, and an Adopt-a-Seminarian program encourages congregations to provide direct donations to ministerial students.

In The Missionary Church, the Lilly Endowment has funded the Financial Fortress Initiative, a fund to help pay ministers’ educational debt if a local congregation matches the money. The program has assisted four pastors since 2009, church officials say.

Meanwhile, the Indiana Conference of the United Methodist Church has a Lilly grant to offer Rejuvenate, a program for clergy, clergy spouses and congregations that teaches financial management and can provide some debt relief to pastors.

Jones says more ministerial candidates are being advised of the financial realities at the outset of their studies.

He says that’s partly to solve a denominational problem with “a relatively large pool” of pastors whose status is now “secular” or “in transition” – meaning they are in the process of leaving active ministry.

“Often what happens is not that a person says, ‘I’m not going into the ministry.’ They go into the ministry, but the erosion of their financial position or financial pressure causes them to leave the ministry and go into secular work,” he says.

“It’s very rare that they’re bitter against the church, but it’s not rare for them to be bitter against the system.”

Verage says he feels fortunate because his family has been adopted – to the tune of $100 a month – by a women’s group from a congregation in his native Wisconsin. He and his wife donate time to the food pantry in exchange for its wares and have used a campus clothing bank.

Verage adds that he wouldn’t change his choice of profession. He’s excited about the ability to soon share the Gospel with a congregation; this year’s graduating class faces a selection process April 30.

“I came to seminary largely because I couldn’t see myself doing anything else,” he says. “I think I would be qualified for other things, but when it came down to it, ministry was the only thing that I really wanted to do.

“And that, with other people telling me, ‘You’d be a good pastor,’ was what factored into my sense I had a calling.”

But, in hindsight, he might have done things differently.

“Honestly, my wife and I, if we could do it again – meet each other and get married and have our son – we would have gone to a state school, because the cost of a private college is just too much,” Verage says.

“We just didn’t know any better.”

rsalter@jg.net

5 Things You Should Never Put on a Credit Card

Credit cards are absolute financial instruments, though cardholders contingency use them delicately to equivocate apropos trapped in a cycle of debt. At a same time, it can be formidable for cardholders to anticipate a outrageous responsibility meaningful that a bank has already extended them sufficient credit to usually assign it.

Yet a credit label is mostly a misfortune means of finance. Credit label debt is unsecured and typically carries a aloft seductiveness rate than a automobile or home loan. And distinct a home debt or tyro loan, credit label debt is never taxation deductible.

Of all a things that be financed with a credit card, here are a 5 worst:

1. College tuition. Many adults can snippet their debts behind to their college years when they didn’t entirely conclude how formidable it would be to compensate off credit label charges, generally after seductiveness starts to compound. And in many cases, college graduates aren’t means to land a pursuit as shortly as they hoped, or they have deficient income to start profitable off their debt.

Rather than regulating a credit card, aloft preparation can be saved by low-interest tyro loans, scholarships, grants, and part-time jobs. And if these sources are inadequate, students can cruise a reduction costly propagandize or check enrollment until they have some-more savings.

2. Taxes. When taxpayers find themselves with an suddenly vast liability, it can be tantalizing to usually assign it. And conveniently, a IRS creates it easy to use a credit label to make payments by one of several companies that they sanction to accept income on their behalf.

However, there are several reasons because we shouldn’t. First, a remuneration processors will collect a price of between 1.88%-2.35%. Also, a IRS will concede we to set adult a remuneration devise with a some-more rival seductiveness rate. IRS underpayment seductiveness rates change any quarter, though are now during 3%, distant improved than any credit card’s customary seductiveness rate. And finally, taxpayers should find to have their self-denial practiced to safeguard that they are not underpaying taxes in a future.

3. A large wedding.  When couples chose to horde a intemperate event, it is easy to know because some people consider that a marriage attention is going too far. Planning a marriage is not easy, though couples need to live within their means and avoid financing a arise with their credit cards . It is a special day for newlyweds, though it is not value it when they are forced to start their lives together underneath a towering of debt.

4. Vacations. People take vacations to take a mangle from their bland lives and to revoke stress. But when travelers financial their trips with their credit cards, they will usually be returning to a problems caused by their debt. Going camping, staying during hostels, and visiting family and friends are usually a few of a ways that people can have a getaway that fits within their means. And if that is not your thought of a dream trip, minister to a vacation account any month until we strech your goal, and use your assets to financial a vacation.

5. Medical bills. Treatment costs for a uninsured can be staggering, though that is no reason to spin to credit cards as a means of finance. Ideally, a uninsured should emporium around before seeking treatment, though that is not always possible. But even after receiving a bill, many providers will be means to adjust their rates and offer remuneration skeleton with small or no interest.

It is one thing to acquire rewards by creation a assign to a credit label that can be immediately paid off, though it is another matter to use credit cards as a means of finance. By bargain because it roughly never creates clarity to financial some charges with a credit card, we can make a best decisions when presented with a vital expense.

More from Credit.com

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No cash for student loan rate fix


WASHINGTON — 

Incoming college freshmen could end up paying $5,000 more for the same student loans their older siblings have if Congress doesn’t stop interest rates from doubling.

Sound familiar? The same warnings came last year. But now the presidential election is over and mandatory budget cuts are taking place, making a deal to avert a doubling of interest rates much more elusive before a July 1 deadline.

“What is definitely clear, this time around, there doesn’t seem to be as much outcry,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “We’re advising our members to tell students that the interest rates are going to double on new student loans, to 6.8 percent.”

That rate hike only hits students taking out new subsidized loans. Students with outstanding subsidized loans are not expected to see their loan rates increase unless they take out a new subsidized Stafford loan. Students’ non-subsidized loans are not expected to change, nor are loans taken from commercial lenders.

The difference between 3.4 percent and 6.8 percent interest rates is a $6 billion tab for taxpayers — set against a backdrop of budget negotiations that have pitted the two parties in a standoff. President Barack Obama is expected to release his budget proposal in the coming weeks, adding another perspective to the debate.

Last year, with the presidential and congressional elections looming, students got a one-year reprieve on the doubling of interest rates. That expires July 1.

Neither party’s budget proposal in Congress has money specifically set aside to keep student loans at their current rate. House Republicans’ budget would double the interest rates on newly issued subsidized loans to help balance the federal budget in a decade. Senate Democrats say they want to keep the interest rates at their current levels but the budget they passed last week does not set aside money to keep the rates low.

In any event, neither side is likely to get what it wants. And that could lead to confusion for students as they receive their college admission letters and financial aid packages.

“Two ideas … have been introduced so far — neither of which is likely to go very far,” said Terry Hartle, the top lobbyist for colleges at the American Council on Education.

House Republicans, led by Budget Committee Chairman Paul Ryan, have outlined a spending plan that would shift the interest rates back to their pre-2008 levels. Congress in 2007 lowered the rate to 6 percent for new loans started during the 2008 academic year, then down to 5.6 percent in 2009, down to 4.5 percent in 2010 and then to the current 3.4 percent a year later.

Some two-thirds of students are graduating with loans exceeding $25,000; one in 10 borrowers owes more than $54,000 in loans. And student loan debt now tops $1 trillion. For those students, the rates make significant differences in how much they have to pay back each month.

For some, the rates seem arbitrary and have little to do with interest rates available for other purchases such as homes or cars.

“Burdening students with 6.8 percent loans when interest rates in the economy are at historic lows makes no sense,” said Lauren Asher, president of the Institute for College Access and Success, a nonprofit organization.

Both House Education Committee Chairman John Kline of Minnesota and his Democratic counterpart, Rep. George Miller of California, prefer to keep rates at their current levels but have not outlined how they might accomplish that goal.

Rep. Karen Bass, a California Democrat, last week introduced a proposal that would permanently cap the interest rate at 3.4 percent.

Senate Democrats say their budget proposal would permanently keep the student rates low. But their budget document doesn’t explicitly cover the $6 billion annual cost. Instead, its committee report included a window for the Senate Health Education and Pension Committee to pass a student loan rate fix down the road.

But so far, the money isn’t there. And if the committee wants to keep the rates where they are, they will have to find a way to pay for them, either through cuts to programs in the budget or by adding new taxes.

“Spending is measured in numbers, not words,” said Jason Delisle, a former Republican staffer on the Senate Budget Committee and now director of the New America Foundation’s Federal Budget Project. “The (Sen. Patty) Murray budget does not include funding for any changes to student loans.” Murray is chairman of the Senate Budget Committee.

The Congressional Budget Office estimates that of the almost $113 billion in new student loans the government made this year, more than $38 billion will be lost to defaults, even after Washington collects what it can through wage garnishments.

The net cost to taxpayers after most students pay back their loans with interest is $5.7 billion. If the rate increases, Washington will be collecting more interest from new students’ loans.

But those who lobbied lawmakers a year ago said they were pessimistic before Obama and his Republican challenger Mitt Romney both came out in support of keeping the rates low.

“We were at this point and we knew this issue was looming. But it wasn’t anything we had any real traction with,” said Tobin Van Ostern, deputy director of Campus Progress at the liberal Center for American Progress.

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Neither Party Has Cash for Student Loan Rate Fix

Incoming college freshmen could end up paying $5,000 more for the same student loans their older siblings have if Congress doesn’t stop interest rates from doubling.

Sound familiar? The same warnings came last year. But now the presidential election is over and mandatory budget cuts are taking place, making a deal to avert a doubling of interest rates much more elusive before a July 1 deadline.

“What is definitely clear, this time around, there doesn’t seem to be as much outcry,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “We’re advising our members to tell students that the interest rates are going to double on new student loans, to 6.8 percent.”

That rate hike only hits students taking out new subsidized loans. Students with outstanding subsidized loans are not expected to see their loan rates increase unless they take out a new subsidized Stafford loan. Students’ non-subsidized loans are not expected to change, nor are loans taken from commercial lenders.

The difference between 3.4 percent and 6.8 percent interest rates is a $6 billion tab for taxpayers — set against a backdrop of budget negotiations that have pitted the two parties in a standoff. President Barack Obama is expected to release his budget proposal in the coming weeks, adding another perspective to the debate.

Last year, with the presidential and congressional elections looming, students got a one-year reprieve on the doubling of interest rates. That expires July 1.

Neither party’s budget proposal in Congress has money specifically set aside to keep student loans at their current rate. House Republicans‘ budget would double the interest rates on newly issued subsidized loans to help balance the federal budget in a decade. Senate Democrats say they want to keep the interest rates at their current levels but the budget they passed last week does not set aside money to keep the rates low.

In any event, neither side is likely to get what it wants. And that could lead to confusion for students as they receive their college admission letters and financial aid packages.

“Two ideas … have been introduced so far — neither of which is likely to go very far,” said Terry Hartle, the top lobbyist for colleges at the American Council on Education.

House Republicans, led by Budget Committee Chairman Paul Ryan, have outlined a spending plan that would shift the interest rates back to their pre-2008 levels. Congress in 2007 lowered the rate to 6 percent for new loans started during the 2008 academic year, then down to 5.6 percent in 2009, down to 4.5 percent in 2010 and then to the current 3.4 percent a year later.

Some two-thirds of students are graduating with loans exceeding $25,000; one in 10 borrowers owes more than $54,000 in loans. And student loan debt now tops $1 trillion. For those students, the rates make significant differences in how much they have to pay back each month.

For some, the rates seem arbitrary and have little to do with interest rates available for other purchases such as homes or cars.

“Burdening students with 6.8 percent loans when interest rates in the economy are at historic lows makes no sense,” said Lauren Asher, president of the Institute for College Access and Success, a nonprofit organization.

Both House Education Committee Chairman John Kline of Minnesota and his Democratic counterpart, Rep. George Miller of California, prefer to keep rates at their current levels but have not outlined how they might accomplish that goal.

Rep. Karen Bass, a California Democrat, last week introduced a proposal that would permanently cap the interest rate at 3.4 percent.

Senate Democrats say their budget proposal would permanently keep the student rates low. But their budget document doesn’t explicitly cover the $6 billion annual cost. Instead, its committee report included a window for the Senate Health Education and Pension Committee to pass a student loan rate fix down the road.

But so far, the money isn’t there. And if the committee wants to keep the rates where they are, they will have to find a way to pay for them, either through cuts to programs in the budget or by adding new taxes.

“Spending is measured in numbers, not words,” said Jason Delisle, a former Republican staffer on the Senate Budget Committee and now director of the New America Foundation’s Federal Budget Project. “The Murray budget does not include funding for any changes to student loans.”

The Congressional Budget Office estimates that of the almost $113 billion in new student loans the government made this year, more than $38 billion will be lost to defaults, even after Washington collects what it can through wage garnishments.

The net cost to taxpayers after most students pay back their loans with interest is $5.7 billion. If the rate increases, Washington will be collecting more interest from new students’ loans.

But those who lobbied lawmakers a year ago said they were pessimistic before Obama and his Republican challenger Mitt Romney both came out in support of keeping the rates low.

“We were at this point and we knew this issue was looming. But it wasn’t anything we had any real traction with,” said Tobin Van Ostern, deputy director of Campus Progress at the liberal Center for American Progress. “At this point, I didn’t think we’d prevent them from doubling.”

This time, he’s looking at the July 1 deadline with the same concern.

“Having a deadline does help. It’s much easier to deal with one specific date,” Van Ostern said. “But if Congress can’t come together … interest rates are going to double. There tends to be a tendency for inaction.”

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