Students To Congress: Don't Let Interest Rate Double
Clarise McCants and Patrick Johnson, both undergraduates at Howard University, are running late — they're on their way to join students from California and Ohio who've come to Capitol Hill to deliver a message to Congress: Don't let the interest rate on federal Stafford loans double in July.
That's the question the U.S. Senate took up on Tuesday with competing proposals.
Neither Democrats nor Republicans want to be blamed for a higher rate, but lawmakers can't agree on how to pay for keeping the rate from rising for future borrowers. Now, the political stalemate has mobilized students like Patrick Johnson, who says the rate hike would be devastating.
"There's a chance that after leaving college, I may not have a job immediately," he says, "and I'm still going to have to pay back these loans eventually. It would really set me back in debt even further."
Clarise McCants agrees: "$1,000 means a lot to me," she says.
If the interest rate jumps from 3.4 percent to 6.8 percent on July 1, that's how much more would be added on average to every new Stafford loan for every year a student is in college.
"The student loan rate increase would effectively make college even less affordable for me next year," McCants says. "These additional costs may seem minimal compared to the fiscal budget or, frankly, the salary of a congressman, but they're a big burden to people like me who are economically disadvantaged."
McCants, Johnson and other students have organized with the help of the liberal think tank Center for American Progress. Their first Capitol Hill visit is with Sen. Rob Portman, a Republican from Ohio. Portman is all for the idea of keeping rates down, but he doesn't want to pay for it the way Democrats propose they do — by closing a payroll tax loophole used by business owners. Instead, Republicans want to pay for it by eliminating a preventive health care fund.
After meeting with Portman's staff, Tiffany Loftin, a student at the University of California at Santa Cruz, sounds upset about something one of the senator's staff members said.
"I have $38,000 in debt, like I told her," Loftin says. "It doesn't seem like she understood how urgent that was because she said it wasn't an urgent matter. I was disappointed."
Policy wonks who've been watching the political skirmish unfold also seem disappointed, especially after President Obama started pummeling Republicans with the issue.
"This small policy issue that the president has made a big deal out of has, in many ways, been overblown," says Matthew Chingos of the Brookings Institution. "I think interest rates are certainly important, but the policy he's talking about is really about an interest rate of one type of federal loan and only on new loans that'll be issued in July and going forward."
For Republicans and Democrats, Chingos says, it's just one more issue with which to attack each other. But more importantly, it's a lost opportunity.
"I think the president got the whole country talking about higher education focused on this one piece when there's this much broader set of issues about affordability," he says.
According to Chingos, a serious conversation about college access, costs and reforming the federal student loan program has given way to political bickering that does little to help students. Now, Congress has less than eight weeks to come up with a relief plan.