Imagine during the worst economic crisis in seven decades that your mortgage interest rate doubles, say, from 4 percent to 8 percent. Imagine also that this trauma is inflicted not by any economic or housing factors but because of the intransigence of a bitterly partisan Congress whose members have nothing against you, but despise each other so much as to just let it happen.A similar threat almost became a reality for 7.4 million college students in America (and more than 100,000 in Washington state). Fortunately, two days before deadline, Congress came to its senses on Friday and approved legislation that preserves the 3.4 percent interest rate for subsidized Stafford loans for undergraduate students.
This measure was a relatively small part of a much larger transportation bill that authorizes more than $100 billion over two years for highway, mass transit and other transportation programs. Rare bipartisan accord was shown Friday as the bill sailed through the Democratic-led Senate by a 74-19 vote. Moments earlier, the Republican-led House approved the measure 373-52. In both chambers, all opposing votes were by Republicans.
It’s unfortunate — and insulting to college students — that this issue had to be disputed for so long, as if college students needed to face one more economic hardship. The truth is, college students are making dramatic sacrifices during this recession. In Washington state, they’ve seen a burdensome pattern of tuition rates soaring by double-digit percentages for multiple years.
The idea of doubling interest rates on student loans emerged two years ago when Congress passed a law designed to save the government money. But pushing the rate to 6.8 percent would’ve added about $1,000 to the average student loan. And in our state, that would’ve meant about $83 million more in loan payments.
Washingtonians should be careful not to under-estimate the significance of this Congressional action. Sen. Maria Cantwell, D-Wash., on Friday cited the Project on Student Debt’s report that said almost 60 percent of Washington’s college graduates in 2010 carried debt. The new bill sends “a message that America is focused on investing in its future. (Friday’s) vote will help more Washington middle-class families to afford college and technical education.”
One change in rules for Stafford loans is noteworthy. Currently, no interest is charged until after graduation, no matter how long that takes. But under the new plan, that period will be capped at six years after undergraduates begin their studies. That’s a reasonable incentive for students to maintain a brisk pace through higher education.
The advantage now for politicians — at least for those who voted for the bill — is the ability to campaign as a pro-education candidate. That’s certainly within their rights, but when it comes to higher education, partisan lines should not be drawn. After all, there are both conservatives and liberals among those 7.4 million college students who are cheering Friday’s action.
The thirst for knowledge and the drive to launch a career are exclusive to no political party.