(Source: By The Day, New London, Conn.) - Congress needs to find a path to compromise before the interest rate assessed on federally subsidized Stafford Loans doubles July 1 from 3.4 percent to 6.8 percent. We first editorialized on this topic back in March, but in Washington these days seemingly nothing gains approval unless a deadline looms, and often not even then.
At this point the debate centers not on whether the lower rate should be extended, but how the cost will be offset. Given the high priority of improving college education rates in this country, and the need to at least mitigate the cost of paying for it, finding a way to pay for the lower loan rate should not be a bridge too far.
In this fight, due credit goes to Rep. Joe Courtney, the Democrat from eastern Connecticut’s 2nd District. Rep. Courtney was focusing attention on the pending expiration of the current rate long before the matter had the full attention of the White House. He introduced in the House the legislation that calls for extending the lower rate.
Granted, both sides have used the issue to try to score political points. In the spring President Obama visited several college campuses to rally support for the extension and criticize Republicans for blocking it. The president is counting on winning the college-age vote, with a strong turnout, to boost his re-election chances.
For their part, House Republicans put Democrats in an untenable position when they proposed off setting the lost revenues of a lower interest rate by cutting preventative care funds – such as health screenings and education – that are among the hallmarks of the Affordable Care Act. Democrats, not surprisingly, defeated that proposal.
It’s now time for the game playing to stop and the legislating to begin. While allowing the interest rate to reset at a higher level would not affect existing student loans, the cost of paying new loans obtained after July 1 would jump for millions of college students, adding on average about $1,000 to the cost of those loans.
In 2007 the Congress, in bipartisan fashion, approved the College Cost Reduction and Access Act, cutting the 6.8 percent rate to 3.4 percent. That reduced rate expires July 1 if there is no compromise. Congress should again strive for bipartisan agreement on this matter.
©2012 The Day (New London, Conn.)
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