June 12 2012
Student Loan Stumping
Vicki E. Alger
…a policy change is coming at the end of this month that will make getting out of debt more expensive for more than 7 million young Americans next year: Without congressional action, the interest rate on Stafford loans will double from 3.4 percent to 6.8 percent, starting July 1.Based on the average loan amount, doubling the Stafford loan interest rate will add more than $1,000 in total costs for borrowers. [Reality check: a former Congressional Budget Office director has calculated that this price-fixing scheme would lower the average monthly repayment a whopping $7] For students who borrow heavily to go to college, it could cost even more. Only Congress can keep these interest rates from doubling. And yet Congress has so far failed to deliver. While I appreciate that some congressional Republicans have recently indicated they’re now willing to work with the administration to find a solution, the debate so far has been largely divided along party lines and made no progress. … President Barack Obama has traveled to colleges and universities across the country, urging Congress do its part to keep college affordable by stopping student loan interest rates from doubling this July.
But who’s really responsible for politicizing student loans? Mr. Duncan’s Department of Education, when it took over the process from the private sector under the specious guise of eliminating the middle man. And, President Obama, who’s apparently on a no-college-campus-left-behind tour, peddling entitlements to young people who will pay dearly for it down the road—after the president’s left the White House for the speakers’ circuit.