George Graham

Why Student Loan Interest Rates are Doubling

On Tuesday afternoon, Senate Republicans filibustered a Democratic bill that would have kept the interest on subsidized student loans at 3.4 percent for another year, instead of doubling automatically on July 1.

To hear Republican politicians tell it, Democrats want to raise taxes to make up for the revenue shortfall that would result from retaining the low interest rate. The Republicans say they would be quite willing to postpone the increase if they could make up for it by taking money from a “slush fund” in the new health care law.

As usual, that’s not quite true.

Democrats aren’t proposing a “tax increase” ; they actually propose to close a loophole that lets corporations dodge employment taxes. And the “slush fund” in the health care law is money designed to cover preventive care.

The fact is that the Republican senators are doing the bidding of their Big Business bosses (as usual).

Lobbyists for such giants as the United States Chamber of Commerce and the American Bankers Association pressured senators to block the Democrats’ bill. Meanwhile, the Republican controlled House of Representatives is cooking up legislation that would call for funding with money cut from the health care reform law. 

Obviously, the House Republicans know their bill won’t get approval from the Democratic majority in the Senate. So, once again, it’s gridlock in Congress.

Instead of making things worse for students, you would think a responsible government would be trying to address the debt crisis America’s college graduates already face.

The total amount of U.S. student debt has reached one trillion dollars – more than the total credit card debt in the country. And, unlike credit card debt or home mortgages, student loan debt cannot be erased by bankruptcy.

The impact on the nation’s welfare will be enormous if this crisis is allowed to worsen. With jobs hard to find and tuition costs rising, America’s young people are trapped in a wretched situation. And America’s future is inevitably compromised.

Sadly, this assault on college kids is part of the Republican agenda to defund public education and create business opportunities for loan sharks and for-profit colleges.

I find it almost beyond belief that a political party would so transparently help powerful predators to exploit the vulnerable. And it is even more incredible that so many of the victims would persist in voting to return that party to power.

Click here to read about the student loan crisis.

About the author

gwgraeme

I am a Jamaican-born writer who has lived and worked in Canada and the United States. I live in Lakeland, Florida with my wife, Sandra, our three cats and two dogs. I like to play golf and enjoy our garden, even though it's a lot of work. Since retiring from newspaper reporting I've written a few books. I also write a monthly column for Jamaicans.com