Lost amid all of the self-congratulating among U.S. senators for passing a bipartisan overhaul of the immigration system is the inaction from the legislators to do anything to prevent student loan interest rates from doubling before leaving for their July 4 recess, according to the Los Angeles Times.
President Barack Obama was able to use the potential student loan increase last year for political gain as they pressured Republicans, who wanted to gain the support of some of the young people who had overwhelmingly voted for President Obama in 2008, into supporting a deal they didn't want. This year infighting among Democrats, the Obama administration wanted a compromise closer to the Republican proposal while party leaders did not, is at least partially to blame, according to the Los Angeles Times.
"Interest rates on student loans are about to double because the president and Senate Democrats won't resolve this impasse," Speaker of the House John Boehner, R-Ohio, said.
The increase in Stafford loan rates is expected to add $4,500 to the cost of a four-year college education a report from the Joint Economic Committee revealed. Student loan debt has skyrocketed recently. In 2007 approximately $550 billion was owed by students; in the first quarter of 2013 that numbers was close to $1 trillion, according to the Los Angeles Times.
Sen. Debbie Stabenow, D-Mich., says that the loan rate increase should be only a temporary nuisance, she expects a vote scheduled for July 10 to return the rate back to 3.4 percent from the 6.8 percent it will automatically climb to on July 1, according to the Washington Post.
"We're going to keep at it until we get this done," Stabenow said. "The White House is completely in support of what we are doing."
Rep. John Kline, R-Minn., chairman of the House Education and the Workforce Committee, said in a radio address that he thinks deciding the rate of student loans is something that the government has no business doing.
"We're in this predicament because politicians put themselves in charge of setting interest rates, guaranteeing exactly this type of down-to-the-wire uncertainty for students and their families," Kline said. "What we need is a long-term solution that gets Washington out of the business of setting rates altogether."
Nella Lipton, a business major at the University of Maryland, told NPR that being a college student is stressful enough without having to worry about fluctuating interest rates for student loans.
It's kind of sad because you hear about everybody defaulting on their loans when they graduate, but I'm just hoping that with my major, I'll be able to get a job," Lipton said. "They're sort of putting the burden on a younger generation, and once we are old enough to vote and once we're part of the economy and we...default on our loans, it's going to be a big issue, and they're going to regret it."
