End bipartisan bickering over student loan rates
The two major political parties in Washington are playing their favorite game of gridlock again, this time bickering over student loans for college.
Specifically at stake is whether to let the current interest rate on those education loans — 3.4 percent — expire on July 1 and return to the 6.8 percent they were in 2007 when George W. Bush affixed his signature to legislation lowering it. The problem is the $6 billion annual cost of that College Cost Reduction and Access Act, which keeps those loans more affordable for some 7.4 million lower- and middle-income students.
Some in Congress would just return to the old rate and be done with it, citing concerns about the deficit and student loan default rates (at 8.8 percent for the latest available year — 2009 — almost double the 2005 mark). Congressman Paul Ryan advocated just that in his budget proposal, which recently was adopted by the GOP-dominated House. The irony there, of course, is that many of them would fight to the death to keep the Bush tax cuts from fizzling out. Many have argued that this is effectively a tax increase on future payers.
Others, Republicans and Democrats alike, would keep the low rate but disagree over how to pay for it. On April 25, Republicans proposed and passed a measure, over the threat of a White House veto, extending the legislation for one year and paying for it through cuts to an ObamaCare program that ostensibly covers preventive care for women and children. Rep. Aaron Schock (R-Ill.) supported that effort, though he notes that long-term, “subsidizing student loan rates is bad policy” and ultimately “not sustainable,” given that “we borrow money from a foreign country so our kids can borrow cheaper money to go to college.”
All but 13 Democrats opposed the legislation — though another dozen of them did not vote, along with 10 Republicans, allowing a minority of the House membership to carry the day — saying they’d prefer to let the rich or oil companies pay the bill with higher taxes, their favorite fallback position. The Senate has its own proposal, with a vote pending in the coming weeks.
As always, there is bipartisan hypocrisy to spare on this issue. Republicans point out that in his own budget, Barack Obama proposed $4 billion in cuts to this same preventive program, with dollars from it reportedly going to some decidedly non-health care purposes such as the construction of bike paths and even pet care. Presidential challenger Mitt Romney, meanwhile, now backs a temporary extension of the low-interest loans, though just months ago he was going around saying he opposed the continuing subsidy. While many conservatives pilloried Obama for pandering to young voters with what they characterized as an election-year bribe to them, it’s curious that some of those same Republicans rushed this vote through so as not to be perceived as being anti-young voter, with the president touring college campuses and accusing them of being just that.
Both the “war on women” and “war on students” cards are being overplayed here.
In any case, tempers are flaring, as exemplified by remarks last week from Speaker John Boehner, who called the president’s politicization of the issue “pathetic ... This is the biggest job in the world, and I’ve never seen a president make it smaller.” Later, in a fiery speech on the House floor, Boehner asked, “Why do people insist that we have to have a political fight on something where there is no fight?”
If that’s the case, then both sides should have no problem reaching at least a temporary accommodation here.
In fact student debt now surpasses $1 trillion in America. For the first time ever in 2010, student-loan debt topped credit card debt in this country. The average student on a Stafford loan now leaves school more than $13,000 in the hole. In significant part the numbers above reflect skyrocketing tuition and room-and-board costs at institutions of higher learning. And now these students face a miserable job market following graduation, with less opportunity and less pay awaiting most of them. Romney on Friday urged young Americans to take more economic risks. Arguably, college itself is becoming that risk, especially for a middle class that is getting socked, and was even before this recession of a lifetime.
Meanwhile, perceptions of whether a college diploma is worth the investment have begun to shift dramatically. In a Pew Research Center study last year, 57 percent of those polled said it was not.
While some of the objections raised above are not without merit, this nation will rue the day it puts a college education out of reach of many if not most of its citizens. If this Congress and this White House do not want to be blamed for that — for in effect crushing what has become an integral part of the American Dream — the Republicans and Democrats therein will find a way to fix this situation. Do not turn this into the debt-ceiling debacle.