Allowing federal student loan interest rates to double is wrong when student debt is burgeoning and recent grads are struggling to find career-track jobs.
Today, President Obama will visit the University of Colorado at Boulder, where he reportedly will push Congress to pass legislation extending the lower loan rate, and we are on board with that idea.
But at a cost of $6 billion annually, we think the president’s advocacy on the issue should include specific and realistic suggestions on how to pay for it. Targeting tax breaks for oil companies, for example, strikes us as impractical given the current divide between House and Senate.
Another important piece is efforts by colleges and universities to cut costs or at least rein in increases.
As we have said, the situation facing young people coming out of college these days is untenable.
A recent analysis conducted for The Associated Press showed half of recent college graduates were either unemployed or working in positions for which they were overqualified.
Higher education funding, from both state and federal coffers, must be part of the public policy equation when lawmakers get serious about crafting realistic spending plans. That goes for policymakers in Denver and in Washington, D.C.
As a society, we cannot allow the full funding of a medical and financial safety net for seniors while we defund higher education and force the next generation to take on crushing debt in order to get a college education. It’s unfair and destructive to the future of this nation.
Already, Americans owe more than $1 trillion in student loans, which is more than total credit card debt.
If the rates on Stafford subsidized federal loans are allowed to double, going from 3.4 percent to 6.8 percent, it will cost an average $961 for each of Colorado’s nearly 167,000 Stafford loan-holders.
And in the Mountain West, according to the AP analysis of employment among recent grads, young people are faring worse than in other regions of the nation. About three in five do not have jobs or are underemployed.
More debt and dimmer prospects for repaying it are a losing equation.
We understand the president is attempting to harness this issue and the despair behind it to prompt young people to vote in November. The president is depicting Republicans as the roadblock to an affordable education.
Republican presidential hopeful Mitt Romney appears to understand this narrative as well. On Monday, he made a point of backing the extension of the current rates when he made a campaign appearance near Philadelphia. And Colorado’s Rep. Mike Coffman, R-Aurora, said it would be “wrong to punish college graduates with a massive interest rate hike.”
It seems likely the extension of the lower rate will prevail as a matter of politics, at least temporarily.
But it is just one piece of an increasingly difficult financial puzzle for young people who are trying to obtain a college degree and a ticket to the middle class.
As a nation and as Coloradans, we are going to have to come to grips with the cost of educating our young people — and the cost of failing to do so.
