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May 16, 2012

Keep students’ interest rates low

From the time I started LEO in 1990 to the present, the number of students who graduate carrying debt has more than doubled. Of every 100 students who earn a bachelor’s degree from a U.S. college this year, 94 owe money when they graduate. I’m not talking about a few text books left over on the credit card: The average student loan debt for a graduate with a bachelor’s degree is $23,300.

Democrats recognized this when we took the majority in 2007 and enacted legislation that lowered the rate on Federal Stafford Loans from 6.8 percent to 3.4 percent. On July 1, that provision will expire, and the interest rate on federal student loans for undergraduates will double if Congress doesn’t act. More than 124,000 Kentucky students will pay an additional $1,000 every year for their loans without an extension. I am pushing a bill to permanently extend the low rate.

But, as with most things during this Congress, there is inexplicable opposition. In this case, Republicans’ disapproval centers on a few basic contradictions about debt.

GOP leaders claim that preventing a significant hike in costs to students is unworkable because it would add to the national debt. They ignore the fact that by providing a better, more affordable option to pay for college, we not only help ensure that our country remains a global economic leader — we actually make money. Far from a drain on the federal budget, the subsidized Stafford Loan program for undergraduates is a net positive. This year, taxpayers will make an estimated $309 million from the program.

Republicans have claimed many times that they don’t want to pass debt on to future generations — and yet they’re ready to add $1,000 per year to these students’ costs, placing the burden directly on the next generation.

Despite their tough talk about the debt, House Republicans voted just weeks ago to give another tax cut to millionaires and billionaires that adds $46 billion to the national debt — with every penny passed on to future generations, including college students.

If Republicans in Congress get their way, tomorrow’s college graduates will not only owe double interest on their loans, they’ll spend their lives repaying the government’s latest giveaway to the already wealthy and well-connected. This is not fiscal responsibility, it’s a reckless disregard for our nation’s needs and priorities.

Money owed for student loans has now surpassed overall American credit card debt, according to the Federal Reserve Board of New York. We all know someone — probably more than one person, in fact — who is struggling to pay off student loans, unable to buy a house, save for their future, or even start a family because of the monthly payment burdens.

Last weekend, more than 2,700 students graduated from the University of Louisville and entered a recovering economy and global job market that grows more competitive every year. The same is happening at colleges and universities throughout Louisville and across the country.

It is my hope that there will be a compromise on student loans, and Congress won’t turn its back on a generation that is so critical to our nation moving forward — or send a message to the generation to follow that higher education is out of their reach.

During the past few years, we have made progress in helping students afford the rising cost of college — whether it’s expanding Pell Grants or insulating student loans from market swings and saving students billions of dollars. We must keep that momentum going and make sure college remains accessible and student loan interest rates low.

College graduates earn an average of $1.3 million more income than those who don’t have a degree over the course of their careers, and they will continue to play a pivotal role in moving our economy forward. America’s future depends on our next generation of innovators — our future engineers, entrepreneurs, teachers, doctors, nurses, and so many other professionals. For them to succeed, they need to see opportunity in education, not an insurmountable mountain of debt.

There is no better investment we can make in our nation’s future than in the education of the next generation. That is who I’m fighting for.

U.S. Rep. John Yarmuth, D-3, is the founder and former publisher of LEO Weekly.

Tagged: Guest Commentary |