President Obama set off yet another cacophony of partisan bickering in Washington by warning that interest on some student loans would skyrocket if Congress didn’t act soon. Last week lawmakers from both parties hinted they were ready to solve the
President Obama set off yet another cacophony of partisan bickering in Washington by warning that interest on some student loans would skyrocket if Congress didn’t act soon. Last week lawmakers from both parties hinted they were ready to solve the problem, albeit in a temporary and superficial way. But first they ginned up another meaningless political battle, leaving roughly 7 million students in the lurch.
At issue is the interest on subsidized Stafford loans, which the federal government issues directly to low- and moderate-income students. In 2007, Congress cut the interest rate gradually from 6.8 percent to 3.4 percent, but only for loans issued before June 30, 2012, after which the rate jumps back to 6.8 percent.
The rationale for keeping the rate low is stronger today than it was in 2007, considering the alarmingly rapid increase in college tuition. It’s worth exploring whether the federal government has enabled colleges to raise tuitions by making loans and grants available to more students, as well as the broader question of how to make college more affordable. But there’s precious little time left to do so. Leaders of the House and Senate education committees say they’re pursuing a one-year extension of the lower interest rate to buy time to work out a more comprehensive approach.
The seeming consensus on a temporary fix, however, has given way to sniping over how to cover the $6-billion cost. Senate Democrats first proposed collecting more payroll taxes on high-income workers in small professional services firms; then their House counterparts called for cutting tax breaks for oil and gas drilling. It’s doubtful these cuts were chosen for their policy merits. Instead, the goal seems to be making the other side look bad.
That’s how the game is played now in Washington. Even when Democrats and Republicans agree on a destination, they can’t help but pick a fight along the way.
