Why Congress must keep student loan rates low
As a nation, we must ensure that our children have access to all the resources they need to help them fulfill their unique potential. This includes access to an affordable college education.
The Tea Partiers in Congress — those self-appointed watch dogs of federal spending — are concerned that the country can’t possibly afford to keep interest rates on collage loans so low. But their concern rings hollow when you consider some of the government’s other lending practices.
The feds regularly make low-interest and interest-free loans to the nation’s big banks. The banks can actually loan the money they borrowed interest-free right back to the federal government — with interest of course, so the banks can make a nice profit for doing absolutely nothing. Incidentally, these are the same banks that — aided and abetted by predatory lending practices — crashed the global economy.
I’ve never heard a Tea Party Republican grouse about how we foot the bill for low-interest loans to banks, but when they talk about keeping interest rates on college loans low they make it sound like the price tag will eclipse the entire defense budget.
The bill currently before Congress, which would keep student loan rates from doubling, will cost $6 billion. That may sound like a lot of money — until you consider that the government secretly lent out some $16 trillion of your money to the big banks. That’s on top of the bailouts they received for wrecking the economy.
If the big banks have access to low-interest loans, so should America’s college students — and, as a member of Congress, I will always vote to keep college loan rates low.
A personal appreciation
I have a very personal appreciation of the value of a college education. Raised by a single mother, my brothers and sisters and I were the first generation in our family to graduate from college. But we couldn’t have done it alone. We were fortunate enough to attend college when Pell Grants were more plentiful and college more affordable.
Pell Grants and guaranteed student loans were the country’s investments in me and my siblings, and we have paid those investments back by becoming contributing members of society. And it was in college that I discovered and nurtured my desire to be a pubic servant.
As hard as I worked to earn my degrees, today’s students have to work much harder. Pell Grants are much less available, while growth in tuition has far outpaced inflation and wage increases. Students are now taking on a lifetime of debt just to get a college education. On top of that, they are graduating into a tepid work environment, where they may be lucky to get any kind of job at all.
For-profit colleges — whose graduates have even more dismal job prospects — are more numerous than ever, offer little in the way of educational value, and eat up a disproportionate amount of government-financed student assistance for the percentage of students they graduate.
As a parent and a public servant, I fear that getting a college degree will soon be out of reach for all but the wealthiest Americans. This would not only kill the American Dream for too many of our nation’s young people, but it will further the economic instability that is the result of our nation’s enormous income inequality.
Critical for the economy
There are any number of ways to keep college loan rates low. Congressional Democrats want to enact a modest tax increase on some employers. It makes sense to ask employers to chip in because they benefit from having a college-educated workforce.
But keeping student loan rates low is only a small fix to a much larger problem. States need to reinvest in their universities so tuition rates can stabilize. Like so many other states, New Mexico cut funding to its universities during the recession, giving these schools little choice but to raise tuition.
State schools should also get more federal funding and Pell Grants for low-income students should be more readily available. We also need to limit access to student financial aid going to for-profit schools, and cut off federal aid to higher education institutions that do not perform well.
Politicians on both sides of the aisle defend low-interest loans to banks as being critical for the economy. College educations are also critical for the economy if America is to continue competing in a high-tech global marketplace.
As a nation, we must ensure that our children have access to all the resources they need to help them fulfill their unique potential. This includes access to an affordable college education. We let them fail at our own peril.
Griego, a state senator and Democrat, is running to represent New Mexico’s 1st Congressional District in the U.S. House.
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