Congress is Too Dysfunctional to Lower Student Loan Rates — Let's Not Give Them That Responsibility
The American people — and especially American students — are all well aware that Congress failed to meet the July 1 deadline to prevent student loan interest rates from doubling. As has been a recent trend, Congress' inaction has resulted in a dramatic inconvenience to their constituents, and an inconvenience that is rooted in an arbitrary ultimatum.
This student loan debacle, which I am tepidly optimistic Congress will resolve when it reconvenes from its July 4 weekend, is a mere microcosm of the operating trend of our government. Republicans and Democrats largely agree on many of the larger provisions of a student loan program. There are, however, a few stipulations upon which each side insists, and these stipulations, and the mulishness of those who hold them, are preventing a well-needed deal. If Congress can compromise on these details, there will be a deal and students and parents alike can breathe a sigh of relief — as long as Congress doesn't tack on another arbitrary expiration date.
Perhaps the most significant disagreement between the Republicans and Democrats on the student loan issue is whether or not student loan rates should be tied to the 10-year Treasury note yield. And there is no greater rationale for adapting this strategy than the very circumstances this issue is in right now.
Thankfully, it is still summer, and students have not yet had to make tuition payments. Members of both chambers of Congress as well as the president insist that a deal will be made before September. Yet there is an undeniable level of uncertainty that resulted from Congress's inability to address this issue when it needed to be addressed. They set the deadline; they should be able to meet it.
It is common sense that student loan interest rates be as low as is responsible. But if the government is too dysfunctional to reflect this universally-understood principle in legislation, then it shouldn't be the government's responsibility. The countless deadlines and cliffs and ultimatums with which the government functions are there to cultivate a sense of urgency so that they actually operate. Student loan rates do not need to be another piece of the government's grand agenda.
If the rates are tied to the 10-year Treasury note yield, students will have more transparency. Moreover, they will not need to worry about petty politics infiltrating their lives with more uncertainty. Republicans and Democrats can talk about caps to the rate and different safety nets for students and parents, but the easiest — and fastest — way for them to lower rates is to attach them to the private sector.