Unless Congress acts, the interest rate on federal student loans will double this summer from 3.4 percent to 6.8 percent. The Obama administration has called for Congress to prevent the increase and Senate Democrats are looking to move a bill doing just that through the upper chamber.
However, House Republicans are refusing to come along, claiming that spending $6 billion to prevent the interest rate increase would require cuts to other higher education programs:
House Education and the Workforce Committee Chairman John Kline (R-Minn.) says that though he’d like to reduce college costs, paying for the loans with deficit spending isn’t the right way to go — and the only alternative would take away from other programs in his own budget for higher education financing. [...]
[T]o maintain the cheap loans, another higher-ed program would have to face the chopping block, said Jennifer Allen, a spokeswoman for the House Committee on Education and the Workforce.
“We are continuing discussions on action to help borrowers and ease the college cost burden for students and families,” Allen said. “Tackling the challenge of the Stafford loan interest rate increase will require tough choices.”
This is, quite simply, a false choice. There is nothing preventing Congress from finding the money to prevent the interest rate increase from anywhere in the federal budget. For instance, Congress could cut wasteful oil subsidies and outdated weapons systems in order to come up with the $6 billion. (The GOP has also evidently neglected to notice that federal student lending is actually profitable for the U.S.)
Already, student loan debt (which tops $1 trillion according to some estimates) is having a detrimental effect on the economy. “We’ve seen massive state divestment from education,” explained Rich Williams, higher education advocate at US Public Interest Research Group. “That’s on top of a bad economy which has caused families to have fewer resources…[I]n this economy we cannot double the interest rates on student loans.” But Republicans are claiming that to do otherwise would put other higher education programs in danger, forcing a disingenuous choice due to their open hostility to financial aid.