Unless Congress acts, interest rates on federal student loans will double from 3.4 percent to 6.8 percent in July. House Republicans have been blocking efforts to prevent the increase, saying they will only agree to do so if Democrats gut a preventive health care fund. The House Republican budget — authored by Budget Committee Chairman Paul Ryan (R-WI) — called for allowing the increase to occur.
The House Republican budget also calls for cutting nearly one million students off of Pell Grants. But in an op-ed Ryan wrote over the weekend for the Wisconsin State Journal, he claimed that Republicans are just attempting to tackle “tuition inflation” with their plan for student loans:
The House-passed budget takes steps to tackle tuition inflation…Consequently, student loan debt is on pace to eclipse $1 trillion. This unprecedented level of borrowing, which has surpassed the national level of credit-card debt, is causing young people to graduate with mortgage-sized debt payments, a debilitating hurdle to clear as they seek to start a family, a career, or a business.
The House-passed budget addresses this problem by limiting the growth of open-ended financial-aid subsidies. Instead, we focus aid on low-income students who need help most. Furthermore, we propose to remove regulatory barriers that restrict competition, flexibility and innovation in higher education.
So to Ryan, the way to deal with growing student debt is to cut student aid and deregulate the industry, presumably to allow for-profit colleges to run even more wild than they already are. Ryan also claims that increasing student aid has driven tuition increases, which isn’t actually true.
Meanwhile, Ryan’s entire op-ed on student loans does not mention the fact that the interest rate on student loans will double in just over a month. Senate Republicans have been equally unconcerned with the rate increase, voting last week for several budgets that would allow it to occur. Earlier this month, Ryan said that he would not approve of closing corporate tax loopholes in order to cover the cost of preventing the rate increase.