CHICAGO (CBS) — If there’s no agreement on the federal debt ceiling by Tuesday, it could mean trouble for anyone who gets money from the government, including Social Security recipients, veterans and the millions of students who depend on federally-backed student loans.
CBS 2’s Dorothy Tucker talked to college students in Chicago who are extremely worried that they’re about to be cut off.
“I think it’s scary for students,” said Allecia Lowery, a sophomore at DePaul University.
Lowery said she is afraid that if lawmakers continue to fight over debt ceiling limit, she’ll feel the brunt of the battle. The sophomore at DePaul has four loans and two grants, totaling $41,000.
If lawmakers don’t reach some kind of agreement by Aug. 2, Lowery fears her student loans won’t be paid.
“My student loans have gone through already, so I’m hoping that they’re not going to take it (away), but if they do, then I won’t be able to go here,” said Lowery.
She is not alone. Nearly 80% of students at colleges around Chicago and the U.S. have some type of federally-backed student loans.
“That’s how I get to school, that’s how I can afford this,” said DePaul sophomore Selina Sepulaveda. “There’s no way I afford to pay out of pocket.”
The concerns are warranted, according to a spokesperson at the U.S. Treasury Department. The spokesperson said, “Without a debt limit increase, no payments can be guaranteed. There is simply not enough money to make them all.”
“It’s unbelievable,” said Keith Freeman, whose daughter wants to attend DePaul.
He is among the many parents who also worry about the future of student loans.
His daughter would like to attend DePaul. If she does, she’ll need help from the government.
“I never knew what a debt limit was until last year,” Freeman said. “I thought we were the country that made the money and spent the money and financed the money. Come to find out we’re the ones that’s in trouble. It’s sad.”
Chicago area colleges are bracing for the worst.
Administrators at DePaul, Columbia, Robert Morris, and the University of Illinois said they’re monitoring the situation and are committed to helping students if we see any cutbacks in student loans.