Finding a way to curb the drastic spike in student loan rates should have been an easy bipartisan win.  Republicans, Democrats, and the White House agree that students and families deserve lasting reform – not annual showdowns in Congress every time the student loan rate is scheduled to rise.  A group of Senate Democrats, however, continues to choose the path of most resistance, blocking long-term measures in favor of a shortsighted, band-aid approach.

‘Pathetic, Non-Solution,’ Says D.C.’s Post

 On July 10, a proposal from Democratic leaders to extend the expiring student loan rates for one year failed to earn enough votes in the Senate.  The stopgap measure would have addressed only about 40 percent of all new federal student loans, cost taxpayers $4.3 billion, and put in place a permanent tax hike with only temporary results.  Within the year, Congress would face another deadline – subjecting the issue to even more political gamesmanship.

As a recent Washington Post editorial put it, “Lawmakers should reject this pathetic, non-solution and put their effort instead into finalizing a compromise plan that is well within their reach.” 

Needless Obstructionism

 That is exactly what many Republicans and Democrats are calling for Senate Majority Leader Harry Reid to do.  Rather than kick the can down the road, widely supported plans to lower student loan rates by linking them to market rates would help students and shield taxpayers from future costs.  Market-based solutions would also remove Washington from the business of arbitrarily fixing these rates in the first place.

Permanent reform makes budget sense, too.  According to the independent Congressional Budget Office, taxpayers will lose an estimated $95 billion on student loans over the next 10 years under the current system.  Last year’s postponement of the rate hike for just one year came with a price tag of nearly $6 billion.

So far, Leader Reid has refused to bring either the bipartisan Senate bill or the plan passed by the House of Representatives for a Senate vote.  Unlike the proposal from Senate Democrats, these plans would lower all new student loan rates, not just the rates for newly issued subsidized Stafford loans.

Much of the recent public attention on student loans has been fueled by the rate increase on these Stafford loans.  On July 1, the rates jumped from 3.4 percent to 6.8 percent, affecting approximately 7 million students likely to take out this type of loan for the next academic year.  

Putting Students First 

There is no excuse for Senate Democrats to play politics on this issue.  Planning ahead for college is a difficult process, and students and families should be able to make these important decisions without worrying about uncertainty in Washington.  The Obama Economy and costly premiums under the President’s health-care law have compounded the challenges that young Americans face.  Financing their education should not add to this burden.

If Senate Democrats are serious about education affordability and accessibility, they must be willing to work together and with Republicans to ensure students have lowest borrowing costs possible.  It is long past time to abandon proposals designed to fail.  Solutions that can have an enduring impact are ready and waiting for a Senate vote.