Rick Santorum chose a time when more families than ever recognize the benefits of higher education to sneer at efforts to increase the affordability of college education. Mitt Romney, fortunately, seems not to share the myopia of his former rival for the Republican presidential nomination. He agreed this week with President Obama that it is in the nation’s best interest and that of students, too, to extend a temporary cut in the interest rate on subsidized federal student loans.
Responding to the rising cost of higher education, Congress in 2007 lowered interest on federal loans from 6.8 percent to 3.4 percent. The cost to the federal government of covering the reduced rate is estimated at $6 billion a year for the 8 million or so students in the loan program. The legislation will expire June 30, and the rate will revert to 6.8 percent unless Congress acts to extend it.
Congress has not. And Republican lawmakers show no inclination to do so. They contend the nation cannot afford to add to the budget deficit, paying $6 billion to help students stay in college, advance their knowledge and skills, raise their income potential and help grow the economy. Yet few rail as loudly as lawmakers about the nation losing its edge in higher education and the need for a better educated and competitive work force.
Republicans insist on tax cuts for the wealthy as “job creators” and employers. It bears repeating that the new industries and jobs will depend on a work force with superior education. The president’s proposed “Buffett Rule,” which Republicans rightly view as a gimmick, does highlight choices. The higher taxes on millionaires and billionaires would support such priorities as expanding the pool of college-educated workers by making postsecondary education affordable for more students.
Students face a rising share of the cost of higher education as both the federal and state governments, including Ohio’s, steadily reduce their share. The Federal Reserve Bank of New York reported in March that the outstanding balance on student loans in the third quarter of 2011 was $870 billion, higher than the credit-card balance and higher than the auto-loan balance. It said $580 billion of the student-loan debt is owed by borrowers younger than 40 years. While Congress dithers about extending the low interest rate, it ignores the financial burden younger Americans are taking on to prepare themselves for the future.