Student loan interest rates set to double
The White House and Democratic lawmakers seek a student loan fix.
On July 1, 2012 interest rates on subsidized Stafford student loans, that almost eight million students use to pay for college, will double. This will cause some borrowers to pay almost $5000. more on their loans over a ten year repayment.
U.S. Representatives Gary Peters (D-Mich) and Joe Courtny (D-Conn) have introduced bill H.R. 3826 to keep Federal Stafford loans at 3.4 percent.
In a written statement to Congress, Peters and Courtny make the case, "When Treasury bonds are being sold at 2 percent and mortgage rates can be had for less than 4 percent, it is outrageous to make college students pay two to three times the going interest rates."
The Obama Administration has taken historic steps to provide Americans with a fair shot at an affordable college education.
President Obama has called on Congress to extend the tuition tax credit and to double the number of work-study jobs over the next five years.
President Obama said, "In America, higher education cannot be a luxury. It's an economic imperative that every family must be able to afford...Making it harder for young people to afford higher education and earn their degrees is nothing more than cutting our own future off at the knees."
At a time when the unemployment rate for Americans with at least a college degree is half the national average, it has never been more important to put higher education within reach for every American.
House Education and the Workforce Committee Chair John Kline (R-MN) noted, "Congress must either allow interest rates to rise on student loans or stick taxpayers with another multi-billion dollar bill."
What hypocrisy! The House Republicans just passed a "small business" tax cut which adds about $47 billion to the deficit. They're not paying for it. They're not talking about it. They don't mind.
Small businesses are defined as companies with less than 500 employees that earn more than $1 million a year. So it's a tax cut going to sports teams, lobbying firms, law firms, hedge fund managers, and the likes of Donald Trump.
Republicans seem to use the deficit issue as a club against Democrats. When push comes to shove, and the choice is between a tax cut or reducing the deficit, Republicans take the tax cut.
Preventing an unnecessary and damaging increase to student loan interest rates should be an area of bipartisan agreement.
It makes no sense for Congress to short change investing in education. We face an increasingly competitive global economy.
To stay on top, we need the most highly educated workforce in the world.
We need to give our young people every chance to succeed in the jobs of today and tomorrow.
Richard O. Schwab was formerly associate head of school, and middle school head, Cincinnati Country Day School. He is currently neighborhood team leader, Glendale Organizing For America Community Team (www.gofact.blogspot.com)
