SAUL LOEB/AFP/Getty Images
US Secretary of Education Arne Duncan speaks about student loan interest rates during the Daily Press Briefing in the Brady Press Briefing Room at the White House in Washington, DC, April 20, 2012. US President Barack Obama, with his administration, is urging the US Congress to step in and stop interest rates on federal student loans from doubling to 6.4 percent on July 1, 2012. For each year that Congress allows the rate to double, the White House said, the average student with these loans racks up an additional $1,000 in debt.
Immigration, tax cuts and health care are some of the items on the greatest hits list of political footballs, but the recent fight over student loan interest rates is the kind of disagreement more traditionally worked out someplace other than in newspaper headlines.
The newest debate surrounds the prevention of interest rates for subsidized student loans from reverting back to 6.8 percent from their current rate of 3.4 percent in July. In this election year, with college costs climbing, a tepid job market for graduates, and a hotly contested youth voting bloc, both parties are on the offensive on the issue.
President Obama called out Republicans for failing to act while families struggle and House Republicans responded late Friday by passing a version of a bill to prevent the hike despite the likelihood that the president will veto it, and the fact that the Democrat-controlled Senate has a bill of its own in the works. Republicans were eager not let Obama have a week to build his case unopposed on the issue during the House’s weeklong recess next week.
But the issue isn’t all bluster - in 2010, U.S. student loan debt outpaced credit card debt for the first time ever for a total of about $1 trillion. Both parties want to keep the rates low, but in typical hyper-partisan fashion they cannot agree how to pay for it.
Is the issue more about votes or financial relief for the American people… or is it just a new place for the major political parties to fight? How can Congress find common ground?
Sandy Baum, senior fellow, George Washington University Graduate School of Education and Human Development
Neal McCluskey, associate director of the Center for Educational Freedom at the Cato Institute