Congress shouldn’t balance its budget on the backs of students
House Republicans released their budget proposal for FY2013 on Tuesday. The resolution calls for massive tax breaks for those making over $1 million per year - at least $150,000 - and oil and gas companies, while slashing the budget of federal programs that serve millions of low-income and middle-class Americans. The Department of Education would be acutely affected by these sweeping reductions in spending.
According to the Office of Management and Budget, the Department of Education would be cut by more than $115 billion over the next decade. This would have deep and lasting effects on many of the Department's programs that provide access to a world-class education for all Americans, regardless of background or ZIP code. Some of the programs hit hardest offer educational opportunities to Americans who might not otherwise have them. One of the programs not mentioned in the House Republicans' proposal – what to do about the interest rates on subsidized student loans.
This July, unless Congress intervenes, interest rates on need-based, government-issued student loans will double from 3.4 percent to 6.8 percent. Subsidized student loans are a critical tool for many students and families paying for higher education.
During yesterday’s House Budget Committee debate on the Republican budget proposal, Rep. Karen Bass (D-CA) offered a Democratic amendment that would keep interest rates on subsidized student loans at 3.4 percent for one more year. It was rejected by Budget Committee Republicans on a party-line vote.
Chairman of the Education and the Workforce Committee Rep. John Kline has said that while he doesn't think the loan rates should double, “it's not the federal government's job.” Democrats disagree. It is precisely the government’s job to deal with what happens to government issued student loans. In fact, it is Congress’ job to set the interest rate on those loans.
In 2007, under the leadership of Rep. George Miller (D-CA) and with bipartisan support, Congress took steps to make higher education more accessible to families for whom a degree may have been out of reach financially. And just last week, students from colleges and universities from across the country gathered on Capitol Hill to urge Congress to prevent the doubling of their student loan interest rates. If Congress doesn’t take swift action nearly 7.5 million low- and middle-income students applying for new subsidized Stafford loans could face as much as $5,000 in higher loan repayment costs.
As we saw earlier this week, the implications of weakening the American education system can be grave and wide-reaching. The Council on Foreign Relations found that failures in America’s education system pose national security threats such as our economic growth and competitiveness. Providing students access to quality education keeps the nation strong and competitive. We can ill afford further gutting of our nation's education system.
If interest rates for students return to the levels they were before Democrats acted, responsibility for those increased costs will sit squarely with Congress.