Higher rates mean bigger burden

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Higher rates mean bigger burden

WC Editorial Board

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This week, President Obama began a tour of college campuses across the nation to rally students against a major interest rate hike on subsidized Stafford loans.

Unless Congress intervenes, July 1 will see the expiration of the 2007 College Cost Reduction and Access Act, which suppressed interest rates at 3.4 percent for four academic years. Without this cap in place, interest rates will double to 6.8 percent, potentially incurring thousands of dollars in additional debt for the millions of students who now rely on the program.

This will make it harder than ever for young Americans to enter college and burden the lucky few for years after they graduate.

As of now, the only push to extend the act has come from Democrat Rep. Joe Courtney of Connecticut. His extension bill has gained 127 co-sponsors in the House of Representatives, none of them Republican.

Politicians on both sides of the aisle are failing to answer popular calls for an extension on the cap, and in doing so, they’re betraying their constituents.

As part of its aggressive campaign to cut government spending, key figures within the GOP have refused to jump on board with the plan, citing a Congressional Budget Office report that estimates the cost of a one-year extension at $6 billion.

This figure may seem like an enormous burden on the public, but it doesn’t compare to the $870 billion in student loan debt held by 37 million Americans, according to estimates by the Federal Reserve Bank of New York.

In fact, 15 percent of Americans are being hamstrung by outstanding student loan debts.

Because student loans can’t be declared during bankruptcy proceedings, even students without the means to pay their debt are legally bound to suffer under the now-growing burden of debt.

Congress has an opportunity to address this situation, but election-time political posturing has blocked any progress from being made.

As MAP grants and subsidized loans face major cuts from legislators, this rate hike appears to be the final blow in the government’s assault on higher education. 

If the cuts are motivated by economic concerns, perhaps legislators should measure the extension’s immediate costs against the long-term problems created by a nation that can’t afford to educate its youth.