If the United States hopes to compete in a global economy, its young people will need access to higher education. Yet Congress is about to make that access significantly more expensive for millions who depend on student loans.
Because of the stalemate, it appears that student loan interest rates will double on Monday.
Here in California, more than 550,000 students receive subsidized Stafford loans. Many are feeling the pinch of dramatic tuition hikes at UC and CSU schools that threaten to push higher education out of reach for low- and middle-income students. All risk becoming collateral damage in another game of partisan chicken.
With the hope of securing the youth vote that helped him to victory in 2008, President Barack Obama championed a low student loan rate on the campaign trail last year. Obama's bully pulpit push helped seal a one-year pact that held federal student loan interest rates at an all-time low of 3.4%.
Never miss a local story.
But time is running out on that deal, and House Republicans are pressing for deficit reductions, including the billions spent subsidizing student loans. They've pushed for H.R. 1911, which would allow student loan interest rates to float, tied to the 10-year Treasury note, and would set a rate cap at 8.5%.
If floating interest rates stay low, the GOP House plan would have little impact on students. But if rates spike -- going above 6.8% -- the impact could be far more costly than if Congress were to do nothing.
We suspect there is a compromise that could be struck to protect both the U.S. Treasury and the national interest of accessible education. But that would require both sides to budge, and neither seems in a budging mood at the moment.
The best solution may be another one-year "punt" -- with Congress extending the current 3.4% interest rate. The current political impasse should not come at the cost of restricting the financial mobility of current and future generations.
There's also another possibility: If a deal is struck after the July 4 recess, the new interest rates could be made retroactive to July 1. But we are talking about Congress, so there's no telling where the partisan talking points might lead.