Here’s the real debt crisis: student loan debt. Today, the average student graduates from college with a diploma and an anchor — $25,000 of debt.
And if Congress doesn’t act, student loan interest rates will double on July 1.
President Obama supports keeping the current Stafford Loan interest rate at a low 3.4% rate. His opponent Mitt Romney just reversed his position and said he agrees. This should not be a partisan issue.
Yet the House bill to stop the scheduled rate increase has no Republican sponsors.
The Republican chair of the House education committee says he has “serious concerns” about the bill. And the Republican budget — championed by Paul Ryan and embraced as “marvelous” by Mitt Romney — both calls for deep cuts in Pell grants and assumes that the interest rates on government sponsored student loans will double.
What are the Republican “concerns”? They claim to be opposed to the $6 billion cost of keeping the rate low.
But jacking up the rate simply shifts that $6 billion cost onto the next generation of students who are already crushed by debt.
And House Republicans didn’t have a problem last week passing a bill with yet another tax break for the rich that would add $46 billion to the national debt.
It gets worse, the key Republican subcommittee chair recently revealed her ignorance about today’s high cost of college. Rep. Virginia Foxx declared she had “very little tolerance” for students with major debt because there is “no reason” to take out big student loans.
Why? Because she worked her way through college 50 years ago … when the cost of college was about three times cheaper.
Conservatives routinely claim we need severe austerity to save the next generation from massive debt. Yet here they are, about to dump more debt on them right now.
Instead of kicking students when they are down, we should end the student debt crisis. The Federal Reserve lends money to banks at rates near 0%, why not lend to students at similar rates? Unlike banks, graduates won’t use the money to blow up the economy.
We need bold ideas to make college affordable and give every child the tools to thrive in the modern economy.
For example, estimates on what it would cost to give every student free tuition at public colleges are LESS than the cost of Ryan and Romney’s pledge to eliminate the estate tax on multi-million dollar fortunes.
Surely it makes more sense to insure that every qualified student can afford the education that he or she has earned than it does to guarantee that the heirs of the wealthy need never work another day in their lives.
We cannot simply protect the status quo. But the absolute last thing our college graduates need right now is to add to the burden of their school debts.
We need to win this fight against the loan rate increase today, and build momentum to win big progressive reforms tomorrow.