Student loans: Plain, simple, necessary and endangered

by Ben Resnik

Knowledge really is power, and when it comes to politics average Americans have limited access to both. For all the endless news reports and sound bytes we are carpet-bombed with, there is very little solid, reliable information available from which to draw conclusions. On the subjects of the country’s foremost public debates, voters need and deserve a clear explanation of what is going on.

No topic needs a more immediate and thorough explanation than student loans. The current debate has been going on for months, but at the center of all the accusations and murky rhetoric is a simple fact: on July 1st, education is going to get a lot more expensive for a lot of people. For decades, the government has been helping students and their families pay for college by offering them loans with low interest rates. With the price of college exploding in recent years, that extra help has become more important than ever:  over 7 million Americans rely on student loans like Pell Grants to help achieve their dream of obtaining a college degree.

But a law that keeps those interest rates low is about to expire, doubling the rate for students’ already existing student loans. Both sides of the political divide want to keep that from happening, but they have reached a sticking point on the question of how.  Republicans are insisting that the money used to help keep college cheap be taken from health care – a demand by which Democrats cannot abide.

If Congress refuses to budge, the impact will reach more people than students and family members, which is already a broad enough group. Should the rates go up, over $7 billion dollars will be siphoned from our recovering economy and used to pay off an ocean of student debt. Instead of business and enterprise, graduates’ first paychecks will go to easing their monolithic burden, a burden that will follow them for decades to come.

This problem does not belong to a needy, dependent few. There are no student loan welfare queens, and for well over 100,000 Virginian students, financial aid means the difference between a dream and a life of debt, or worse, a life robbed of an education.

Low-interest student loans keep money where it should be, in businesses and communities, and in the pockets of college students and graduates. Pell Grants and the like are not job creators, but they are professional creators. They allow for the production of a group of talented, qualified, and educated men and women ready to enter the workforce.

After all the jargon and all the misinformation, this is the plain, understandable, and positive role that low-interest student loans have to play. For millions of young people within the Commonwealth and without, loans and grants make possible higher education, and from there, an efficient economy of informed and able Americans.

And yet there are those, in elected offices and otherwise, who would minimize financial aid as a matter of principle. Previous Congresses, and Virginian representatives within them, have succeeded in stripping the funding from loan services and in rendering students ineligible for them. Their justification is not that the loans aren’t helpful; rather, it stems from the idea that less government is always better. The current Congress, too, has been instilled with this principle, which has had no small part in producing the current impasse.

But it is a bad principle. The best government is not the smallest government but the most effective government. Low-interest student loans are not wasteful, nor are they an overreach; they provide a needed service, an alternative to private loan companies whose astronomical interest rates produce the only kind of debt that can follow someone through bankruptcy. Student loans are just what their name implies, loans to be repaid and which give millions of students an opportunity from which they would otherwise be unjustly deprived. To allow the student loan interest rates to double would weaken the economy and everyone in it, student or non-student, and a political credo is no leg to stand on. Time is up; the games must end, and Congress must legislate.

 

 

 

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