On June 28, we shared (via Facebook) an Inside Higher Ed article about the political deadlock that made it so that the interest rate on student loans would double from 3.4% to 6.8% on July 1. At that time, it seemed clear that members of Congress were unwilling to cooperate to get the job done and keep the rate from doubling. And that is indeed what happened when Congress failed to act before the deadline
Knowing that the rate hike was a heavy burden on students and families (but likely more concerned about alienating young voters), members of Congress went back to the drawing board in an effort to reach some sort of agreement that would soften the blow of the rate hike. Squabbling Republicans and Democrats were close to a compromise, but that derailed when it was calculated that the estimated cost of the plan over 10 years was $22 billion.
Right now, the rate hike that occurred on July 1 stands. Interest rates are a fixed 6.8% on student loans and that is indeed up from 3.4%. Congress, which seems to have little trouble bailing out banks and mega-corporations, is once again unable to reach agreement in solving the problem and there is no indication as to when or even if that will be resolved.
This stalemate clearly sends a message to students and families that the affordability of higher education is not a priority for politicians and that they are more concerned with short-term savings than with education and enrichment. It’s certainly easy to get angry about this (and rightly so), but Patricia Murphy makes an important point that there is a much-bigger problem encompassing affordability in her article “The Real College Crisis Isn’t About Student Loan Rates.”