I am happy to see that much of the media in America has been discussing the student loan problem, and even characters like the Republicans are putting “$1 trillion debt” in their attack ads. it was a problem that the Republican Party mostly created, with the help of less-than-ethical school administrators in colleges throughout the country.
What surprises me is that Congress has to be shamed into even small moves like keeping the rate for subsidized student borrowing at 3.4%. (Unsubsidized borrowing from the feds is always 6.8%—has been since 2006.) This is what advocates talk about when they say “don’t double my rate”.
The point that I’m not seeing out there is the simple fact that the student loan interest rate since the 1960’s has always been something near the U.S. treasury borrowing rate, or even a bit below. So, really, these should be 2% loans. Not 3.4%. Two.
(Maybe a reader can tell me, that in Australia, they are 0% loans, right?)
There are many proposals surfacing to do something about the $1 trillion in student debt. The best ones are those that seek to wipe the slate clean after 10 years, which is Hansen’s H.R. 4170. As I was saying the other day, and can’t repeat enough, this is what student debt was when it was first conceived in the 1960’s—a program where the student paid a bit over to the lender for getting that leg up in his or her studies. (Studies that were, by and large, mostly funded by grants until about 1974.)
In the last century, a well-educated workforce was seen as part of national defense, as well as a boost to the economy. We are slowly losing our advantage to other countries that don’t play games with college finance.
I know that the clown-slash-Congressman we send to Washington, Joe Pitts, hasn’t made a peep about the issues facing students in Lancaster County. Pennsylvania is a college state. More money for colleges means more opportunity for Pennsylvania. I really wonder where these guys’ heads are (and it’s mostly guys) down in Washington, when they make these financing systems that so discourage our young people to devote some of their future to educating themselves.