We don’t need what U.S. Sen. Lamar Alexander, R-Tenn., calls “a manufactured crisis.”
But once again Democrats and Republicans are at odds. This time in the Senate over a fix for student loan interest rates. On July 1, interest rates on federally subsidized Stafford loans are set to double to 2008 levels – from 3.4 percent to 6.8 percent – unless Congress acts. That could cost students who max out their loans every year more than $1,000 over last year.
Senate Democrats want to kick the can down the road for two years while they seek a comprehensive plan. Senate Republicans want interest rates tied to 10-year Treasury notes with the rate stable until the loan is paid off. Both failed to pass. The GOP plan is similar to one President Barack Obama favors.
The House in May passed its version of a fix that also links interest for new loans to 10-year Treasury note yields, but Obama promised a veto, partly because it allows the rate to fluctuate. That would not be an issue with the GOP Senate plan.
Millions of students need to know what their payback obligations are up front. Linking the loans to a financial benchmark sounds reasonable. So does keeping the rate the same until the loan is paid.
While everyone isn’t on exactly the same page, most aren’t far apart. As Alexander lamented, “If we can’t agree on this, we can’t agree on anything.”
Lawmakers should find a compromise before July 1. Students need to know where they stand.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.