Dear Commons Community,
With the student debt crisis already hobbling the young, the last thing the country needs is a federal policy that makes college even more costly. But that’s what the country got earlier this week when the US Congress allowed the interest rate on the subsidized federal loans to double from 3.4 percent to 6.8 percent. A New York Times editorial calls for the return to an affordable interest.
“If this increase is allowed to stand, more than seven million mainly low- and middle-income borrowers who begin college in the fall will pay an average of about $1,000 more per loan. That would mean about $4,000 more in debt for students who finish in four years, with the burden falling on people who could least afford it.
Congress could avoid this debacle by passing Democratic provisions pending in both the House and Senate that would extend the lower rate for one year, giving lawmakers a chance to restructure the complex student loan system. But, incredibly, some Republicans are supporting proposals that would cost students and their families even more than the new doubled rate — using the proceeds for deficit reduction.
Those who want to keep the rates affordable understand that college educations benefit the work force and the country as a whole. Those who would increase the burden on borrowers see a college education as an asset that benefits the individual alone. That’s a dangerous idea, at a time when this country is steadily losing ground to its increasingly better prepared competitors abroad.”
The New York Times has it right and the US Congress wrong!