Posted on 04/21/2012 10:01:03 PM PDT by Libloather
Pelosi joins Democrats' push for Republicans to act on student loan rates
By Mike Lillis - 04/21/12 11:11 AM ET
The leading House Democrat on Saturday joined President Obama in calling on Republicans to extend low interest rates on student loans.
House Minority Leader Nancy Pelosi warned that allowing rates to jump, as they're scheduled to do this summer, would put college "further out of reach" for middle class families struggling in the still-limping economy.
"[I]f Republicans don't act, interest rates are set to double this July, and more than seven million borrowers will find themselves paying more," Pelosi said Saturday in a statement. "In this time of economic hardship, we should be helping make college more affordable, not putting it further out of reach."
The comments are the latest salvo in the intensifying partisan debate over whether to extend a popular, five-year-old student loan benefit. Republicans say the country simply can't afford the $6 billion tab, while Democrats counter that the country will benefit many times over by a more educated populace. They're hoping to frame the debate as one of contrasting priorities, with Republicans fighting for the wealthy and Democrats focusing on the the middle class.
"In America, higher education cannot be a luxury; it’s an economic imperative that every family must be able to afford," Obama said Saturday in his weekly address from the White House.
A 2007 law – the College Cost Reduction and Access Act – cut the interest rate on federal Stafford loans in half, from 6.8 to 3.4 percent. The legislation was initiated by Democratic leaders in Congress, but it passed with Republican support, and President George W. Bush signed it into law.
Without congressional action, the rate returns to 6.8 percent on July 1.
Republicans are already pushing back. Rep. John Kline (R-Minn.), chairman of the House Education and Workforce Committee, argued this week that any extension of the loan benefit should be offset with changes elsewhere in the budget. Additionally, Kline warned that the one-year time-frame doesn't solve any problems, but "simply kicks the can down the road and creates more uncertainty in the long run."
"Bad policy based on lofty campaign promises has put us in an untenable situation," Kline said Friday in a statement. "We must now choose between allowing interest rates to rise or piling billions of dollars on the backs of taxpayers."
Complicating the Republicans' argument about deficit concerns, GOP leaders this week passed a small-business tax cut bill estimated to pile $46 billion onto the deficit this year alone. Republican leaders have argued that tax cuts don't need to be offset, but Democrats are wondering what happened to the GOP pledge to fight for a balanced budget.
Rep. Steny Hoyer (Md.), the Democratic whip, hammered Republicans during the tax bill debate for defying their own platform of reducing deficits.
"If we are going to be serious about giving confidence to the economy, to the American people, it will be because we put our country on a fiscally sustainable path," Hoyer said. "Continuing to blow holes in revenues will not do that."
It takes a LOT of hours at summer jobs and working through school to pay off $80,000 or even a fraction of that.
When I was in college 45 years ago, I paid most of my tuition with jobs. It was a whopping $750 total per semester for 18-19 credit hours. Now $750 won't buy ONE credit hour at a lot of schools. And most kids aren't carrying 18 hours anymore.
Those of us who worked our way through school and paid off our loans in a timely manner didn't have to contend with Obama's wretched economy.
"U.S. Teen Unemployment at Unprecedented Levels"
http://www.ibtimes.com/articles/206588/20110831/us-unemployment-teens-obama-jobless.htm
My point is that the woman with the 80k in loans took out tuition, room and board, and apparently living expenses to attend a state school. Her parents contributed nothing and she also contributed nothing. If her parents were really unable to pay nothing, she should have gotten some financial aid. If they weren't incapable of paying, but simply choosing not to, then she should have been working her butt off during summers and breaks. No way she should have had to pay her entire state school education with student loans unless she was a) too lazy to work during college or b) spending foolishly. Either way, somebody, presumably her parents, should have smacked her upside the head while she was an undergrad.
I will agree the economy is in a depression. However, I still think kids can hustle waitressing, babysitting, and lawn mowing jobs. As a bonus, they're largely paid under the table. And if you can't get a job mowing lawns, you're just not trying.
I agree, tuitions are out of line with reality. I've been predicting for years that college tuitions are the next bubble that's going to burst. However, I think the number of people who actually need to be taking out loans that cover full tuition AND room and board are miniscule. The number of people who actually do take out the full amount is both staggering and frightening.
That's the problem, in a nutshell.
The number of people who actually do take out the full amount is both staggering and frightening.
I'm not sure what the maximum student loan amount is this year (our kids who are in college managed to avoid taking out student loans thanks to scholarships, work, and help from us) but I don't think the maximum loan amount is sufficient to cover tuition, room, board and other essentials (for instance, each student is required to bring their own computer). State schools average close to $20 K per year, and private schools close to $50 K.
Another cause of education inflation is the frivolous course requirements. Courses in "diversity" and social science are required for an engineering degree.
Also, the part-time jobs that students used to rely on to work their way through school have been snapped up by desperate adults who've lost their full-time jobs, and by illegal aliens getting paid under the table.
How do you earn $10,000 in a summer at $7 an hour? That’s 1400 hours. At 8 hours a day, that’s 175 days. at 5 days a week that’s 35 weeks. That’s a LONG summer.
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