The White House has ramped up its efforts this week for congressional action to prevent interest rates on the Stafford federal college loan program, now at 3.4 percent, from doubling on July 1. As important as addressing that crisis is, it is one skirmish in a much larger fight to return college education to what it has historically been, a boost up the economic ladder, rather than the economic millstone around the neck of young people that it is today.
President Obama plans to make a speech on the subject at the University of North Carolina on Tuesday, no doubt underscoring the themes in his weekly White House address on Saturday. In address, he warned that “if Congress doesn’t act, on July 1st interest rates on some student loans will double. Nearly seven and half million students will end up owing more on their loan payments. That would be a tremendous blow.”
For many students, a doubling of the interest rate on their student loan would mean as much as an additional $5,000 out of their pockets, said Molly Katchpole, who is doing online activism for Rebuild the Dream, in an interview today.
President Obama and rational lawmakers in Congress are arguing that the government should be taking steps to make college more affordable for everyone, and intervening on this issue would seem to be a no-brainer first step. “Making it harder for our young people to afford higher education and earn their degrees is nothing more than cutting our own future off at the knees,” Obama said. “Congress needs to keep interest rates on student loans from doubling, and they need to do it now.”
A leading conservative voice on higher education issues, however, last week opted to blame the students rather than acknowledging the problem. Rep. Virginia Foxx, R-N.C., said that she had “very little tolerance for people who tell me that they graduate with $200,000 of debt or even $80,000 of debt because there’s no reason for that.” After all, according to Think Progress, she could pay off the tuition fees she racked up as a student at the University of North Carolina in the 1960s in the seven years it took her to graduate—at the rate of what would be $671 a semester in today’s dollars. In other words, as Katchpole said, “what she paid per semester is akin to what we pay each semester in books alone.”
Katchpole, herself laboring under a heavy student debt load, launched a petition denouncing Foxx, which will be delivered Tuesday to House Speaker John Boehner with more than 108,000 signatures. It makes clear that a broad cross-section of the public will not stand for conservative grandstanding and scapegoating on the issue of college student debt.
But this isn’t simply about the interest rate on a single loan program or about the bone-headed comments of a clueless congresswoman. Katchpole is right when she says in our interview that “drastic measures need to be taken to make sure that college is affordable everywhere.” Even at less than 4 percent interest, asking young people to take out loans of $20,000 or more to get through a year of college is absurd—and especially so when these students are then graduating into an economy with too few jobs and too-low wages.
President Obama could start by staking out a bold position that low-cost or no-cost college—in other words, the return of the kinds of options that used to exist at many state colleges before states drastically cut tuition subsidies—be on our agenda for economic recovery. And we shouldn’t look to “pay for” such an initiative with cuts to other programs vital to our domestic economic security. This is an investment that would pay for itself with more people able to acquire the knowledge and skills needed to build a vibrant, innovative economy.
At the very least. President Obama should be considering legislation such as a bill by Rep. Hansen Clarke, D-Mich., which if enacted would forgive a student’s outstanding loan debt once the student has made payments equal to 10 percent of his or her discretionary income for 10 years. “This provides student loan borrowers with a second chance, those who have been struggling financially,” Clarke told his colleagues on the floor of the House. “And by cutting this debt, this frees up their money to invest on their own. That will create new jobs throughout this country.”
What we should have no tolerance for is the lawmakers who are more interested in belittling the struggles of working-class students and parents than doing whatever is necessary to ensure they can be the cornerstone of a new economy of broad prosperity.
Molly Katchpole will be a featured speaker at the Take Back the American Dream Conference, June 18-20 in Washington. Click here to learn more and register.