published Saturday, April 28th, 2012

GOP threatens college loans

The personal cost that students and their families pay to get a college degree has doubled over the past couple of decades as state governments have shrank their support for higher education. That has forced ever larger numbers of students to take out increasingly higher college loans, leaving the average graduate today carrying a $25,000 education debt when they finish school.

And now, if Congress can't come to an agreement by July, the interest rates on federally subsidized student loans would double, from 3.4 percent to 6.8 percent. That would add another $1,000 to average annual repayment schedules for students who received Stafford loans. That's a burden the government ought not to impose on students who presently rely on these loans, or on graduates trying to enter a tough job market and to earn a decent wage.

Until President Obama began pressing for legislation to continue the lower interest rate that his predecessor, President George W. Bush, signed into law in 2007, House Republicans had refused to approve legislation to keep the 3.4 percent rate intact.

Some GOP critics said the $6 billion annual cost to lower the interest rate had indentured students to socialism. Republicans' presumptive presidential nominee, Mitt Romney, who used to support the lower rates on Stafford loans, had reversed himself, and had argued more recently that lower interest rate should be terminated because it prompted colleges and universities to raise their charges excessively.

In fact, the Ryan budget bill that GOP House members recently approved not only eliminated the lower rate; it also proposed to cut $10 billion in taxes -- chiefly for business and the nation's richest taxpayers. That shows their real values.

Public pressure spurred by Obama's campaign this week to keep the rate cut in place has finally forced both House and Senate Republicans to commit to retaining the 3.4 percent rate. But there's still no agreement on how Congress should pay for that expense. Republicans want to offset the cost by cutting preventive health-care benefits for women under the Affordable Care Act, the Obama administration's health care reform act which is being phased in.

Democrats, by contrast, want to offset the cost of the extended student loan rate by terminating needless federal subsidies for oil companies that mainly benefit the five largest and richest oil companies, which are earning record-high profits. Terminating these needless taxpayer subsidies would save $24 billion over the next decade. Republicans, however, object to ending these gratuitous subsidies.

That's absurd. The three biggest companies alone netted $80 billion in profit last year. An administration analysis shows that the big companies reap an additional $200 million in profit every quarter on just a 1-cent rise per gallon of gas.

If Congress can't agree on legislation to offset the cost of continuing the 3.4 percent rate on student loans, the current consensus on keeping the rate cut intact will fall apart. That would undermine college financing plans for the approximately 7.4 million with Stafford loan debt, and for pending borrowers who will need students loans in the future.

The greater national interest lies in boosting graduation from both four-year and two-year colleges. Investing in students' education is, in fact, the smartest and most efficient way to promote economic growth and a rising standard of living for American families.

It used to be that both political parties agreed on the value of education, and helping students finance college was taken for granted. If Republicans now spurn that wisdom, it bodes ill for the direction of the country and our economic future.

Comments do not represent the opinions of the Chattanooga Times Free Press, nor does it review every comment. Profanities, slurs and libelous remarks are prohibited. For more information you can view our Terms & Conditions and/or Ethics policy.
joneses said...

This has got to be the dumbest article I have ever read. The pathetic author wants one to believe the oil companies are responsible for the failure of the student loan program. This falls in line with obastard continuing to blame everything else on his failures but him. Do you people not realize the oil companies do not get anymore tax breaks than any other business? Why do you not demand GM and Chrysler give back the 50 billion dollars the government gave the unions and these two companies to help with the student loan program? Obastard is politicizing everything and lying to you fools just to get elected and to continue his quest to destroy America. Anyone that believes anything about this article is a fool.

April 28, 2012 at 6:15 a.m.
EaTn said...

I see these right-wingers have raised the white flag on the war with women by trying to cut essential preventative care from the health care law to help pay student loans. They'd do anything to keep from touching the fat-cat tax benefits. The dems won this round by default.

April 28, 2012 at 7:07 a.m.
gjuster said...

Harry -

Why not blame the real cause of the student loan mess - the colleges. Look at their tuition rates over the last decade and you'll see that they have gone up far faster than inflation.

April 28, 2012 at 8:39 a.m.
TOES02800 said...

I know you libs think Limbaugh lies, but the facts he states in this piece are indisputable.

April 28, 2012 at 10:50 p.m.
Mila78 said...

Prices for college education are extremely high today. Lots of parents and families just can not afford to pay for this, that's why taking out a student loan is such a popular option. Some students take out private student loans which are much more expensive than federal ones. On one hand, it's clear that teachers and professors should get good wages, but on other hand, prices should be more affordable, otherwise student loan debt will not stop groving. It would be good if there would be ore alternatives to student loans and student have what to choose from.

August 14, 2012 at 8:24 a.m.
please login to post a comment

videos »         

photos »         

e-edition »


Find a Business

400 East 11th St., Chattanooga, TN 37403
General Information (423) 756-6900
Copyright, Permissions, Terms & Conditions, Privacy Policy, Ethics policy - Copyright ©2014, Chattanooga Publishing Company, Inc. All rights reserved.
This document may not be reprinted without the express written permission of Chattanooga Publishing Company, Inc.