Why Congress must keep student loan rates low
Eric Griego
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.
Ah, I do love Mr. Foley’s definition of “proof”; I never tire of watching someone attempt to justify the good old, “I say it, therefore it must be true and everyone obviously agrees with me despite all evidence that belies both of these statements”-argument. As much as I enjoy insane political theater, I am eternally grateful to the Republican voters of the 57th District for having the sense to realize that such diversions do not belong in the halls of power and thus removing a man with a notoriously short-temper and an ethically-questionable tenure in office.
BTW: If only 25% of the population receives a college diploma, they are almost by definition “upper class.”
(looks at my income)
(looks at the income needed to be upper class)
(looks at my income again)
(looks at the income of everyone who I went to graduate school with)
(looks again at the income needed to be upper class)
…I’m sorry, I can’t tell if this was supposed to be a joke? Yes, eventually, I hope that me and my peers will be making $75k or more a year, which would put us in the top 27% of US incomes, at least in 2005. But since the median income in 2003 for a person with a bachelor’s degree was $69k, getting a bachelor’s degree does not automatically equate to upper class. Particularly during the obtainment of said degree, and during the obtainment of any additional degrees needed/wanted.
Why do you hate America, D Foley? Why do you want to make us all poorer and stupider? Why don’t you know anything about economics? Why don’t you find out the facts before you go talking about things? Why do you like asking endless rhetorical questions like this?
Why do you hate a group that fights for Fiscal Responsibility, Constitutionally Limited Government and Free Markets? The real question in this election Eric is why are you against this? Why aren’t you a member?
what do you and your Liberal friends have against a group that started to fight out of control spending,
You are wrong. Spending isn’t out of control. See
http://economistsview.typepad.com/economistsview/2012/05/government-spending-sometimes-things-are-not-what-we-think-they-are.html
How about the $787 BILLION stimulas package that has been a total failure so far
You are wrong. The stimulus worked about as well as predicted, although the problem was bigger than predicted. See:
http://delong.typepad.com/sdj/2009/09/estimating-the-effect-of-stimulus-just-what-is-going-on-here.html
The most pessimistic credible post I could find said that 7 of 9 studies say the stimulus worked:
http://www.washingtonpost.com/blogs/ezra-klein/post/did-the-stimulus-work-a-review-of-the-nine-best-studies-on-the-subject/2011/08/16/gIQAThbibJ_blog.html
Why do you hate a group that fights for Fiscal Responsibility, Constitutionally Limited Government and Free Markets?
Maybe because your idea of “fiscal responsibility” is partisan nonsense that means spending to make the country better is bad while spending to make the rich richer is good; Maybe because your idea of Constitutionally Limited Government means the government can do anything it wants about intruding into peoples’ sex lives and kill people without due process of law, but the government can’t prevent the superwealthy from buying elections of improve the health care system to make people healthier and live longer; and maybe because it’s a well known truth that Free Markets aren’t perfect and need government regulation.
I am not sure where to start with this one? Once again Eric can not help himself and thnks we should all be paying for what HE feels is important. I beleive a college education is important but not for everyone! There is a large group of our population that needs to and watns to go the route of vocational education but once again Eric and his elitist lefties beleive they know what is right for everyone so step back and listen to them?
Eric what have you done to improve education in NM for K-12? How about Higher Education while you were in the NM Senate?
So Eric you seem to be pretty angry with the money going to the banks? I guess you are going to go to Wahington and let President Obama know you disagree with his vote which was a YES! How about the $787 BILLION stimulas package that has been a total failure so far, you going to take on Barack Obama on that issue as well?
See Eric you need to know that with a victory comes responsability and offering up one liners, while may work doing stand up, doesn’t work in making the US better! Your philosophy and that of your friends that hates people for being successful in life is getting old. It is funny that when you take a leave of absence from a “non profit” you get a parachute but when someon from a business does it you are angry. Come on Eric you can’t be half pregnant! Stop saying anything to try and get elected.
More importantly instead of going after Americans that are tired and part of the Tea Party the real question is why aren’t you are part of it? what do you and your Liberal friends have against a group that started to fight out of control spending, bailouts and takeovers of private industry. Why do you hate a group that fights for Fiscal Responsibility, Constitutionally Limited Government and Free Markets? The real question in this election Eric is why are you against this? Why aren’t you a member?
Mr. Guessing:
Both your attention span and your grasp of satire are unsurprisingly limited; I and several others have been intentionally misspelling your name that way for over a year after someone (Dr. Hays, I think, though I don’t recall exactly) did it by accident and it was widely agreed that the irony of such a name applied to a man whose idea of “evidence” generally translates to “I already believe things that I made up” was too good to pass up. I make no apologies for the fact that it’s sometimes hard to ignore the cheap thrills. If you’re looking for a point of reference for when this occurred, think back to a conversation where I asked Heath why he was still damaging this site’s credibility by publishing your columnar tirades from a bizarre Twilight Zone out beyond the right-wing fringes without at the very least making that damage equal and complete by publishing an author on the loony fringes of the left of equal repute as yourself… to which I suggested Don Schrader.
That you can’t tell the difference between the Constitution and the Articles of Confederation, that you run a think tank whose supposed focus is economic opportunity but apparently don’t know the definition of “upper class”, that you frequently use as evidence reports from other organizations that contradict that which you are using them to demonstrate, that you constantly propose solutions that are mathematically insolvent, that you are automatically against any solution proposed – or even demonstrated – to assist anyone who doesn’t own a business regardless of whether their elimination would actually do anything to solve whatever problem you are concerned about that particular day, that you have on several occasions quoted “facts” that you got out of chain e-mails, that you frequently use partial statistics to back up the comfortable reality that you’ve invented for yourself (i.e. “If only 25% of the population receives a college diploma…” when it’s actually over 40%, with 28% holding bachelor’s degrees), that you openly support limitations of opportunities that this country has spent over two centuries creating, and that by doing so you are demonstrating that your understanding of economics is so unevolved that you favor a class system from the eighteenth century are just a few of the multitudinous good reasons that you are the perfect demonstration of the decline of common sense in this country’s politics; we are entertaining your views as legitimate barely a generation after such fantasies would have rightly exiled to the very rear echelons of the Tin Foil Hat Brigade.
You’re a communist, pgessing?
but if society is paying the bills, shouldn’t higher ed resources be dedicated to science, math, engineering, and other in-demand fields?
That surely sounds like you’re supporting a centrally planned command economy in education. What happened to the idea of the free market? Weren’t you one of the ones advocating school vouchers, where the government paid the bill but parents got to choose the school? (my memory may be in error about that). Would you also say that if the government is paying the bill for health care (e.g. Medicare, employer sponsored health insurance which is not taxed) that the government should tell you which doctor to see?
I think the wealthiest among us can and should pay their own bills for entry into the upper class.
So you’re in favor of higher taxes on the rich? The people who society pays to become better educated, and thus earn a higher income, would pay back our investment in them if we taxed them at a higher rate. That’s the way investments work – put money in now, get money back later. The answer is not to make it more difficult for poor people to get the skills to get higher paying jobs, but to help people and then tax them to help the next generation. That would make everyone richer.
Trying to claim that making it easier to afford a college education and thus creating a healthier middle class is somehow the same as upward redistribution of wealth is the most truly impressive lie you’ve ever managed to invent
Gotta agree. It’s like arguing that since the heirs of Sam Walton get lots of money because those Wal-Mart semis can move goods on the highways, and that even poor people pay gasoline taxes to build highways, we shouldn’t build highways because it means an upward redistribution of wealth. A better transport system makes us all better off, just the way a better educated workforce makes us all better off – and we all should help pay for both things.
Dear Icaraus,
Perhaps you should figure out to spell my last name before attacking me. Secondly, I am all for anyone who desires to get an education, to be able to do so. Pouring more and more money into palatial campus buildings and hooking more and more students on debt, is not the way to do this. There is no need to innovate and bring the costs of higher education down, nor is there an incentive to dedicate scarce resources to those areas that are most likely to benefit society. This latter issue would not be a problem if students paid their own way (I have not problem with arts or philosophy majors), but if society is paying the bills, shouldn’t higher ed resources be dedicated to science, math, engineering, and other in-demand fields?
Griego and his ilk just want to keep the money flowing upward. BTW: If only 25% of the population receives a college diploma, they are almost by definition “upper class.” Nothing at all wrong with that, but I think the wealthiest among us can and should pay their own bills for entry into the upper class.
Mr. Guessing:
I’d like to be the first to congratulate you for officially reaching the pinnacle of your career. For a man who has made a living out of making bizarrely asinine statements that make no logical sense to any human being with at least a first grade education, the fact that you have finally made the most ludicrous statement that you have ever managed to make must be a source of great pride to you. Trying to claim that making it easier to afford a college education and thus creating a healthier middle class is somehow the same as upward redistribution of wealth is the most truly impressive lie you’ve ever managed to invent out of something that you clearly haven’t even taken even a minimal effort to understand. Your steadfast dedication to your flat-Earth theories is an inspiration to us all.
Griego should really stop trying to redistribute wealth UPWARD. After all, according to this report, in 2008, four-year college graduates earned nearly $22,000 more yearly than those with just a high school diploma. Of course, Griego and his buddies want taxpayers (many of them with only a high school diploma) to subsidize the costs of a diploma for the 25% of Americans who get a college diploma.
Get Congress out of the student loan market and the price of higher education will come down.
Nobody would argue that student loan rates should be “low”. However, Mr. Griego wants to ignore some of the major issues. One issue is how easy and cheap should it be to borrow money as a student, that is part of the current problem. There are numerous examples of students graduating with $250,000 in loans to pay back. They are buying more than tuition, room and board at a state university. Why should we taxpayers subsidize extravagant lifestyles and expensive universities? And another issue is how do we pay for these loan subsidies? They can’t add to the monstrous debt we already have, and obviously Congress can’t agree as to how to pay, surprise. The liberals have their tired old mantra of tax the rich. The conservatives want to cut spending, and so it goes in our polarized do-nothing Congress, Mr. Griego will just reinforce those stalemates and polarization politics.
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