Written by Griffin Hatten | Staff Writer
President Obama has one staunch supporter – Jimmy Fallon. Thanks in part to Mr. Obama and Mr. Fallon “slow jamming the news” together, student loan debt has become America’s public policy discussion over the past few weeks.
A debate has risen between Democrats and Republicans over student loans. Both political parties agree on keeping the subsidized Federal Stafford Loans at their current rate of 3.4%. However, the two parties disagree on how to keep these rates from rising to 6.8%. A decision needs to be made by July 1 in order to keep these rates at 3.4%. Subsidized Federal Stafford Loans make up one-third of all student loan debt.
On one side, you have the Republican-controlled House. They support paying for these loans by cutting money from a preventive health fund in Obama’s health care law. Facing off versus the House Republicans is the Democrat-controlled Senate. The Senate aims to vote on a version of the bill paid for by eliminating a corporate-tax loophole that lets ‘wealthy’ individuals pay less in Social Security and Medicare taxes – with ‘wealthy’ meaning individuals who make $125,000 per year or families who make over $250,000.
Being a college student, I would be (like most of you reading this) affected by this potential change in rate. I have benefited from this low interest rate installed by President Obama and the government -albeit it has only been at its rock-bottom low of 3.4% for the past year. I also would like to be ‘rich’ and make $125,000 per year without seeing it taxed away at 35%. But what’s even more upsetting about this issue is its inability to address the real problems associated with college affordability.
Surely, it matters that 7.4 million students would be affected if Congress fails to act. Yes, the economy over the past four years has been unkind to recent graduates. However, the real problems associated with college affordability lie far away from this political sideshow.
Keeping in mind that subsidized Federal Stafford Loans only make up one-third of student loan debt, we can begin to realize the problems are deeper than this campaign topic. According to one estimate by Jason Delisle of the New America Foundation, the higher rate of 6.8% would cost the average borrower $1,800 more over a ten year period. By my calculation, that’s an extra $9 per month – certainly not an amount that will significantly contribute to a lessening of a graduate’s finances or make or break a student’s decision to attend college. It would cost around $6 billion over the next year to keep rates where they are now. This wouldn’t bust the budget by any means. This also wouldn’t provide any sort of solution to the real problem at hand.
President Obama is seeking to keep the rates low right now for another year, but let’s not forget his real goal – to win the votes of college students when each of us goes to vote in November. You can be assured this is as big of a part of his political campaign as any. I ask each of you to step outside the picture and look at the frame.
Sure, Mr. Obama has helped us college students. Sure, he comes across as ‘cool’. But I know keeping the cost of borrowing money low for another year won’t solve the problem of the rising cost of education. It’s like giving comforting words to someone who’s just broken an arm. It might make them temporarily feel better, but it ultimately won’t solve the problem. Let’s find someone who is willing to actually stand up for future college students.