Congressional Inaction Means Student Interest Rates For College Double Today

For months now, Congress has known that if they do nothing the interest rate for college student loans will double on July 1st (from 3.4% to 6.8%), and yet that is exactly what they have done -- NOTHING! And their inaction will be disastrous for students trying to get an education and better their lives.

There is still an argument going on in Congress, and some are trying to get an emergency measure passed that will extend the current rate for another year -- giving Congress more time to come up with a longer-range solution. Personally, I think that is inadequate. The fact is that college is being priced out of the range of poor and working class students, and even many in the middle class -- and that is the real problem, not the interest rate for borrowing to get an education.

The costs of a college education has ballooned in recent years -- rising much faster than the Consumer Price Index (the official inflation rate). This is due to the policies of the Republican Party, who have decided that education is not a national priority -- but a product that should be sold at the highest price the market will bear. They have done this by cutting both national and state funding for education, deregulating tuition at state-supported schools, keeping the amount of government grants too low, and raising the interest rate of student loans.

The upshot of this insane higher education policy is that a college education has been made much harder to get for most Americans. Students now must either saddle themselves with an incredible amount of debt to go to college, or decide that they cannot afford a college education -- and the raising of the loan interest rates will just make that debt even larger, and convince even more students that college is out of reach for them. Note in the chart above that about 75% of the student debt is held by students coming from families in the bottom 50% of wage earners (and as we know from census reports, most of these people live on wages within 150% of the poverty level). The middle class (the next 25%) holds another 15% of the student debt.

Congress is taking a very short-sighted view on education, by worrying about a few dollars in interest rates rather than how to enhance the ability of Americans to get a college education (and graduate degrees for those who want them). Giving more students the opportunity to get a college education will help this nation (and its economy) far more than making money on interest rates. Educated students are in better shape to provide the innovation and research capability to keep this nation moving -- and those with an education will earn more (and spend more in the economy), and will pay more in taxes.

If Congress was smart they would be giving students who qualify for college free tuition, and give colleges enough support to keep other costs very low. I know right-wingers will claim this is something that cannot be afforded by the government, but the truth is that it would be cost-effective. The increase in government revenue due to the higher taxes paid by educated Americans would be greater than the cost of educating them. Other developed countries know this, and substantially subsidize college educations for their residents.

What is wrong with our own government? Why can't they see that simple fact? Could it be that the Republicans, who still control what can happen in Congress, care only about the wealthiest Americans (and corporations)? I believe so. They want only to keep taxes for the wealthy very low -- regardless of what that does to the rest of America. This is just one more reason (among many) why we must vote the GOP out of power in 2014.