Student Loans: A Political Prop
Today, President Obama is visiting Nevada (translation: a battleground state) to discuss student loans (translation: to court the youth vote) and sign a memo focused on student loan repayment options (translation: repackage another spending proposal that lacks accountability as a new idea).
In less than a month, student loan interest rates, an industry controlled nearly totally by the federal government, are set to double, increasing from 3.4 percent to 6.8 percent. While there are few politicians in Washington who oppose freezing rates at current levels for another year, Republicans and Democrats have yet to agree on how to pay for the $6 billion legislation.
Republicans initially put forth a plan that would scale back government programs, while Democrats insisted on a proposal that would raise taxes on the rich. Both were ultimately rejected.
On Tuesday, however, Republican leadership in the House and Senate wrote a letter to the President outlining a third plan: tweak portions of the President’s fiscal 2013 budget to offset the costs. Ignoring their solution, President Obama staged a campaign-style rally in Las Vegas, where he is expected to point a finger at Republicans for delaying the process.
With $1 trillion worth of student loans in America, it is an important issue to many especially those struggling in this economy. A solution undoubtedly should be finalized before the July 1 deadline, but the President’s “My Way or the Highway” grandstanding is only fortifying the political divide and postponing any real action.
Moreover, President Obama is plastering over the real issue. His entire focus is centered on making students loans less expensive to hold but fails to address in any way how to reduce the overall cost of receiving a higher education.
Some may try to cast off student loans as a side effect of a down economy, but the root of the problem lies in the skyrocketing cost of colleges and universities which has been occurring for quite some time. A recent report by the National Center for Public Policy and Higher Education found that “published college tuition and fees increased 439 percent from 1982 to 2007 while median family income rose 147 percent.”
There is a clear lack of accountability within the higher education sector that has led to the unbridled tuition and fee increases that are burdening millions of Americans.
Some have insisted on throwing tax dollars at the problem, this has been done in the past and has only perpetuated the issue. Others, however, are coming together around a different model, one that holds colleges and universities accountable, rewards student-focused programs, and promotes outcome-based funding.
As with other areas of government, however, Washington is dwelling on how to pay for the problem, rather than how to fix the problem. In the process, President Obama has held the issue of student loan repayment up as a political prop, distracting voters and policymakers away from the real reforms that could help reduce the need for student loans at the onset.
Stephen DeMaura is the President of Americans for Job Security