The 2007 College
Cost Reduction and Access Act halved interest rates on subsidized Stafford
loans from 6.8% to the current rate, 3.4%, over the following four academic
years. Unless the current rate is
extended, it will revert back to 6.8% on July 1. President Obama advocates maintaining the
current rate, emphasizing the importance of affordable education for students.
According to
this New York Times article, Republicans claim that Obama is attempting to use the
issue of federal student loans to his electoral advantage. “Bad policy based on lofty campaign promises
has put us in an untenable situation,” said John P. Kline Jr., the Minnesota
Republican who is chairman of the House Committee on Education and the
Workforce. According to Republicans,
Obama is impractically endangering our nation’s finances in order to appeal to
the youth vote.
Whereas the 2007
act was passed with bipartisan support, the legislation introduced by
Representative Joe Courtney to extend the 3.4% rate had only Democrats among
its 127 co-sponsors. Courtney asserts that,
given public support for the legislation, it would be difficult for Republicans
to oppose it. “The response of students
and parents is one of disbelief that interest is going to double at a time when
interest rates are so low, and I think it’s very politically dangerous for
Republicans to stonewall this,” Courtney said.
According to the
Congressional Budget Office, the cost of maintaining the rates is $5.8
billion. This CNN article demonstrates
how Republicans have emphasized that this high cost places unfair
responsibility on taxpayers.
In his weekly
address, Obama stressed the importance of college degrees for employment
opportunities; according to him, the unemployment rate for Americans with at
least a college degree is roughly half the national unemployment average. “In
America, higher education cannot be a luxury,” Obama said. “It’s an economic
imperative that every family must be able to afford.”
According to the Federal Reserve Bank of New York's March report, national student loan debt is currently greater than
credit card and car loan debt, at $870 billion, a startling comparison that Obama has cited. Since the mid-1990s, as college tuition prices have risen, the average
loan size has doubled and the number of students borrowing loans has risen from
roughly one-half to two-thirds.
To gain student
support for his campaign, Obama plans to visit University of North Carolina at
Chapel Hill, the University of Colorado at Boulder, and the University of Iowa
at Iowa City next week. He will appear
on comedian Jimmy Fallon’s late-night show on Tuesday to discuss student loans,
which will be broadcast from UNC Chapel Hill after his speech.
The issue of
student loans is critically important to many Americans. As such, it may prove to be a rallying issue
among affected voters in Obama’s election campaign. Through public speeches and the media, he
seeks to connect with students and especially younger voters. Meanwhile, the Republicans’ continued aversion
to increase taxes, resulting in their opposition to Obama’s plan, may alienate
them from these very voters.
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