That no-brainer came on a three-campus trip to North Carolina, Colorado and Iowa on which Obama exhorted students to pressure Congress to keep interest rates on federally subsidized loans from rising on July 1 from 3.4 percent to 6.8 percent. He’s certainly right that student debt – an issue UNC has focused on in recent years – can be a serious opponent of students’ economic progress once they leave college. That’s the case already, with the average college student amassing about $25,000 in debt, and allowing interest rates to double would cost typical loan recipients an extra $1,000 a year.
No wonder Republican Mitt Romney joined in the call for Congress to roll back the scheduled interest rate increase. But Democrats and Republicans are, as usual, sparring over how to pay the cost of keeping the rate at 3.4 percent, and it’s not certain Congress will act.
So this is one of those (many) times when the public interest demands that the two parties reach agreement, and that’s the message representatives and senators ought to be hearing and heeding.
Equally, though, education administrators need to declare a truce in the nationwide “arms race” in which schools vie to offer enhanced and expensive amenities that have little to do with learning. And state legislatures – including our General Assembly – should place higher priority on maintaining historically modest tuition and fee levels at public universities.
Because while it’s true that subsidized loans enable colleges to ratchet up costs while sparing students and their families the immediate pain, the far greater cost driver is states’ (and private institutions’) unwillingness to dig deeper to keep costs reasonable in the first place.
Raleigh News & Observer