The personal cost that students and their families pay to get a college degree has doubled over the past couple of decades as state governments have shrank their support for higher education. That has forced ever larger numbers of students to take out increasingly higher college loans, leaving the average graduate today carrying a $25,000 education debt when they finish school.
And now, if Congress can't come to an agreement by July, the interest rates on federally subsidized student loans would double, from 3.4 percent to 6.8 percent. That would add another $1,000 to average annual repayment schedules for students who received Stafford loans. That's a burden the government ought not to impose on students who presently rely on these loans, or on graduates trying to enter a tough job market and to earn a decent wage.
Until President Obama began pressing for legislation to continue the lower interest rate that his predecessor, President George W. Bush, signed into law in 2007, House Republicans had refused to approve legislation to keep the 3.4 percent rate intact.
Some GOP critics said the $6 billion annual cost to lower the interest rate had indentured students to socialism. Republicans' presumptive presidential nominee, Mitt Romney, who used to support the lower rates on Stafford loans, had reversed himself, and had argued more recently that lower interest rate should be terminated because it prompted colleges and universities to raise their charges excessively.
In fact, the Ryan budget bill that GOP House members recently approved not only eliminated the lower rate; it also proposed to cut $10 billion in taxes -- chiefly for business and the nation's richest taxpayers. That shows their real values.
Public pressure spurred by Obama's campaign this week to keep the rate cut in place has finally forced both House and Senate Republicans to commit to retaining the 3.4 percent rate. But there's still no agreement on how Congress should pay for that expense. Republicans want to offset the cost by cutting preventive health-care benefits for women under the Affordable Care Act, the Obama administration's health care reform act which is being phased in.
Democrats, by contrast, want to offset the cost of the extended student loan rate by terminating needless federal subsidies for oil companies that mainly benefit the five largest and richest oil companies, which are earning record-high profits. Terminating these needless taxpayer subsidies would save $24 billion over the next decade. Republicans, however, object to ending these gratuitous subsidies.
That's absurd. The three biggest companies alone netted $80 billion in profit last year. An administration analysis shows that the big companies reap an additional $200 million in profit every quarter on just a 1-cent rise per gallon of gas.
If Congress can't agree on legislation to offset the cost of continuing the 3.4 percent rate on student loans, the current consensus on keeping the rate cut intact will fall apart. That would undermine college financing plans for the approximately 7.4 million with Stafford loan debt, and for pending borrowers who will need students loans in the future.
The greater national interest lies in boosting graduation from both four-year and two-year colleges. Investing in students' education is, in fact, the smartest and most efficient way to promote economic growth and a rising standard of living for American families.
It used to be that both political parties agreed on the value of education, and helping students finance college was taken for granted. If Republicans now spurn that wisdom, it bodes ill for the direction of the country and our economic future.