The Republicans have offered a bill that would raise the rate even higher -- between 8.5% and 10.5% (showing they don't think education is for poor, working class, or middle class students). And President Obama has offered his own idea, but it would also leave the interest rate too high for too many students. Obviously, neither of our two major parties cares much about providing an easy path for deserving students to get a college education -- in spite of the fact that providing that education would be one of the most cost-effective things the government could do.
The only political party (at least so far) that has a reasonable position on student loans and student education is the Green Party. Here is what the Green Party Shadow Cabinet has to say on this issue:
As millions of high school, college, and graduate school student receive their diplomas this season, their thoughts will turn to their accomplishments, the pride of their families, and, for most, the inescapable constraint of student loan debt. The undergraduate class of 2013 will graduate with an average of more than $35,000 in student debts, according a study by Fidelity Investments. This is the highest ever average debt load of any class. Whereas their parents might have had to work for a summer to pay for a year’s worth of tuition, the costs of higher education have risen so astronomically for the Millennial generation, and Generation X before them (by over 1100% since 1978, according to Bloomberg), that paying their tuition with a summer job is literally impossible for someone without a college degree. Thus, students are forced to take out loans to get the educations they need to build prosperous futures, swelling the national student debt load to now over one trillion dollars, more than what Americans owe on credit cards and auto loans. Education reduces poverty and improves health. It increases civic engagement and decreases crime. Education is correlated with improved outcomes in nearly every socio-economic health indicator. But these days, students who are not independently wealthy are being harshly penalized. The Millennial generation coming of age in America is caught in a uniquely American trap: they need money to survive, and to get enough money to survive, they need a decent job. To get a decent job in a post-recession economy flooded with the unemployed, Millennials have to get a degree. And to get a degree in the American college system, they have to pay a great deal of money, which in turn requires them to already have a job that pays well. It is a vicious cycle, and the only way the majority of our nation’s youth can escape it is to take out massive student loans. Student debt makes it harder to secure car loans, nearly impossible to secure home loans, garnishes future income, and stifles educational aspirations. Default rates are now as high as one in three, but unlike other debts, student loan debts continue on even after bankruptcy. Student loans are sometimes so large that the young people taking them out don’t truly grasp how much they will owe until it’s too late. And why would they? Student loan literacy is still not taught in most U.S. schools. And most students, especially first-generation college students, don’t have parents or family members who had to deal with similar levels of student debt in their college days, so even their closest support networks can be caught off guard by the severity of a new graduate’s indebtedness. Meanwhile, top student lenders like Sallie Mae, Wells Fargo, and the U.S. Department of Education itself reap billions in profit from the student debt racket. This predatory lending must end, and real relief must be provided for the young people whose futures have been foreclosed on by student debt. This flawed system is based on decades of devaluing and cutting education investments, and the political status quo continues to fail our youth today. Recently proposed Republican legislation aimed at addressing the problem by tying federal student loan interest rates to treasury notes is completely unacceptable because it would actually send interest rates skyrocketing upon economic recovery. Proposals coming from the Democrats have offered to put band-aids on the student debt crisis, but still fail to address the need for long term restructuring of much more education funding and tuition reform. Sen. Elizabeth Warren’s Bank On Student Loan Fairness Act and Rep. Karen Bass’s Student Loan Fairness Act are both put forward respectable first steps, but even these fail to really strike at the heart of the issue -- that these students’ educations should have been free in the first place. Education is a human right that should be accessible for all, which is why the Green Shadow Cabinet supports a fully-funded, free public higher education system that removes the initial and lifetime barriers to higher education that so many of our young people and older students face. It is also why we oppose student debt “forgiveness” policies, which unjustly blame the victims – people who have been taken advantage of for trying to better their lives through education – for the crimes of a political duopoly that has slashed education funding for decades and a financial industry eager to make a profit on the backs of our children. Instead, because the unjust burden placed on our youth and students by student debt amounts to a new form of indentured servitude, we support a policy of Student Debt Emancipation - the immediate end to all student loan payments as part of an economic stimulus package that would reinvest in our nation’s education system and allow our young people to have the same chance that older generations had to make a brighter future for themselves and their families. Accessing education has always been a pivotal part of achieving the American Dream. And if that dream is to be preserved for future generations, we must transform the higher education system that has become a debt sentence to our youth into one that is fully funded and empowers the young to set out for a better future.