Politics Straight, No Chaser
Student loans turn into partisan issue
Published: Tuesday, May 1, 2012
Updated: Tuesday, May 1, 2012 02:05
With college graduation looming for many across the country, the issue of student loan debt was sprung to the forefront of the political arena last week. As May commencement ceremonies come and go, this time of celebration will be met by two thirds of graduates finding themselves strapped with loans and fast approaching payments due to their holders. The problem is further exacerbated by the fact that approximately one in every two new college graduates can’t find jobs. It is clear the burden of higher education has become a national epidemic, as it was announced recently that college loan debt has exceeded credit card debt, reaching more than $1 trillion to be the primary cause of debt in America .
While President Barack Obama visited Iowa University to meet with students and speak about the debt issue last week , back on Capitol Hill what was expected to be a routine and nonpartisan piece of legislation aimed at easing some of the burden devolved into bickering between the political parties .
The issue at hand was over the Stafford Loan, a loan offered through the U.S. government to low-and moderate-income higher education students. Because the government guarantees these loans, they come with a lower interest rate than private loans . They also include a “grace period” during which students are not expected to make payments while studying full or part time and are not required to for another six months after graduation. There are two kinds of Stafford Loans, subsidized and unsubsidized. Subsidized Stafford Loans require students to demonstrate certain financial need and excuse the student of any interest accrued in college.
The issue at hand last week dealt with subsidized Stafford Loans. In 2007, Congress approved the cut of interest rates from 6.7 percent to 3.4 percent, but only for loans authorized before June of 2012. Congress proposed that if the economy bounced back enough and more college graduates were able to find adequately paying jobs by this date, then there would be less of a need for the rate cut. It was clear to both sides that interest rates need to be slashed once again to help low-income college graduates make ends meet.
As the issue became increasingly politicized in the media, both parties saw opportunities to gain points with their constituents. A disagreement emerged about how to pay for the $6 billion cost of the rate drop. First, Senate Democrats suggested that the money be collected by raising the payroll tax or that the federal taxes taken out of paychecks each pay period from the nation’s wealthiest Americans in certain industries. Then Democrats in the House of Representatives proposed to eliminate controversial tax breaks for the oil and gas drilling. Both of these tax reform proposals are standard Democratic talking points. House Republicans fired back by passing an amendment to the American Care Act —President Obama’s controversial 2010 healthcare reform act—that would cut funding for state-run preventative efforts. This measure passed largely on party lines and was dead on arrival in the Senate.
The House and Senate education committees are now looking into a one-year extension to the rate cuts that will give the parties time to figure out their differences without putting students at risk . An extension would also overlap the upcoming presidential and congressional elections that may swing a vote in either direction.
“This is beneath us. This is beneath the dignity of this House and the dignity of the public trust that we enjoy,” Speaker of the House John Boehner said on the issue.
Across the country, most Americans would agree with this sentiment. It is disheartening, even in our current hostile political climate with our lethargic Congress, that on an issue where both Democrats and Republicans can agree, they resort to bickering and end without a solution for the American people.
Adding fuel to the fire are the skyrocketing costs of the basic college education. Many suggest the entire system of higher education needs to be overhauled. A college degree is staggeringly cheaper and easier to attain than in the United States in countries around the world. In recent speeches, Obama tells of how he and first lady Michelle Obama, who both came backgrounds of limited means and attended some of the world finest academic institutions, just recently finished paying off their student loans.
It is evident that a predictor of economic success is an education beyond high school. Among those with a college degree, the unemployment rate in the U.S. is approximately 4 percent. Among high school dropouts, it is approximately 14 percent. Investing in our future means investing in education at all levels. Especially in the case of higher education, it is especially clear with higher education that making a college degree more feasible for more people is the key to success for both the individual student and the nation as a whole.