The Anger Blog-Battle Over College Loan Interest Rates

At a time when most of us are having a difficult time financially, the Republicans are trying to stick it to us again. They were in favor of letting a 2007 law expire, the result of which would double the existing interest rates on subsidized Stafford (student) loans from 3.4% to 6.8%. Approximately 70 percent of those obtaining a bachelor's degree have sought financial help. They leave college with their degree and an average $26,000 debt. This increase in the interest rate would cost the student an additional $1,000 in interest.

The conservative Republican representatives apparently feel that most people should be able to pay for college without taking out a loan. I wonder if they realize that college costs have increased faster than the median household income. Since 1995, the cost of college has risen five times as much as income has.

President Obama has been traveling around the country, talking to students regarding this increase which is set to take effect July the first. He is letting them know that the Republican controlled House would rather raise their interest rates to help balance the budget than try to get the money elsewhere (for example, from raising the tax rates on millionaires or eliminating huge subsidies for Big Oil that are paid for by the American taxpayer).

Since current public opinion via the young adult vote is strongly behind the President, House Speaker John Boehner is now willing to keep the rate at 3.4% … but only if the money used to fund this measure is taken from the Prevention and Public Health Fund. This fund is used for such measures as providing immunizations and medical tests, as well as implementing community-based health care interventions. Nonetheless, eliminating those and similar services is indicated by the Republican-controlled House of Representatives to be a better move than curtailing handouts to the oil companies that are, at present, reporting record profits ($137 billion last year alone by the 5 largest companies, up 75% from the previous year).

One Republican argument is that the Prevention fund has been used before and was agreed to by Democrats, to help offset the cost of extending the payroll tax benefit. But that's the very reason Democrats do not want to rape this public health fund again, saying it was previously necessary to get the payroll tax bill passed. Since Democrats were forced to compromise on the payroll tax issue, why aren't House Republicans willing to allow their sacred cows (Big Oil and millionaires) to be a part of the sacrifice this time?

The current bill, therefore, stops the interest rate on student loans from increasing to 6.8% (maintains it as 3.4%) but has a rider attached that requires that money be removed from the aforementioned services to compensate for what would have been gained by the government if loan interest rates were to double. Knowing that the Democrats may vote against this bill, due to the harmful rider, the Republicans realize they will be able to say, "We voted to keep the rates at 3.4%, but the Democrats voted against it." And there will be many, many voters who hear that message but never get the whole story. Plus, with rising loan interest rates, along with tuition hikes, there will be many prospective students who decide not to go to college.

This type of political maneuvering angers me to the point of depression.