High cost of college
Published on -4/27/2012, 9:42 AM
Not that long ago, the cost of borrowing money to attend college was significantly lower than the rates charged homebuyers. Unless Congress acts by July 1, students will face interest rates twice as high than those charged for long-term mortgages.
The issue is garnering the attention of both President Barack Obama and his likely opponent this fall, Mitt Romney. This week, party leaders on both sides of the aisle in the U.S. Capitol agreed they didn't want student loan interest rates shooting up to 6.8 percent either.
With solid support coming from both sides, students who use the subsidized Stafford loans to help finance their university education should have been able to breathe a sigh of relief. Their parents, too.
But as this is today's overly political climate in Washington, nothing is easy. Not when there are political points to score.
The rhetoric is heating up about how to pay for the $5.9 billion needed to keep the interest rates low. And rather than find a source both could agree on, the parties are singling out each other's sacred cows.
Democrats in the House want to eliminate federal subsidies to oil and gas companies. Senate Democrats are seeking higher payroll taxes on private S corporations.
House Republicans are even more disingenuous. The budget they already passed assumed the rates were going to shoot up to 6.8 percent. Now that they've been put on the spot and are reversing course, they've selected Obama's health care overhaul. Money slated to pay for items such as breast cancer screening, childhood immunizations, research and wellness education would be diverted to cover the lower interest rates on student loans. And we shouldn't have to remind our readers almost every Republican in office has vowed to "repeal Obamacare." They're promising to pay for a program with dollars from another program they're still promising to kill.
When Congress can't even find a solution for items both parties agree should happen, it's a sign the system is broke.
The nation's elected leaders need to rededicate themselves to doing the work of the people.
No less than 90 percent of U.S. parents expect their children to go to college. Even with steadily increasing enrollments at post-secondary institutions, tuition somehow keeps rising much faster than inflation. As such, student loans show no signs of decreasing in the future.
Average student loan debt recently topped $25,000. Overall student loan debt recently passed the $1 trillion mark, and now is larger than credit card debt. And since student loans can't be discharged via bankruptcy proceedings, there is growing concern another financial crisis is looming.
"This could very well be the next debt bomb for the U.S. economy," said William Brewer, president of the National Association of Consumer Bankruptcy Attorneys.
Congress needs to do what it can to keep student loan interest rates low. The factions need to find an agreeable funding source rather than offering hot-button sore spots guaranteed to fail. Common ground exists -- elected officials simply need to use their college-educated brains to find it.
Editorial by Patrick Lowry