Congress Student Loan Deal is a Slap in Millennials' Faces
As deal-making over the interest rates of federally subsidized student loans finally begins to subside, politicians are making a lot of noise, but avoiding discussion of the fundamental problem. Arguing over what amounts to less than $10 per month while promoting policies that incentivize overall higher debt burdens for college students seems ridiculous — which is precisely why you don't hear politicians admit that's what they're actually doing.
This political theater in Washington represents the latest manufactured crisis that yields finger-pointing rather than good policy. In an increasingly dysfunctional fashion, politicians wait until the last minute to address crucial issues, despite full knowledge of impending deadlines. Then, when said deadlines pass and allegedly Armageddon-style consequences occur, the rush to "fix" the problem creates — you guessed it — more problems.
In the student loan debate, both Republicans and Democrats are equally culpable. Republican Speaker of the House John Boehner, employing strikingly pro-government-takeover rhetoric, launched a #DontDoubleMyRate campaign, aimed at blaming Democrats in the Senate for failing to pass legislation to address the automatic rate increase from 3.4% to 6.8%. While Boehner is correct to point out that the Senate did not take action when it should have, his posturing puts Republicans on the side of defending more intervention in the already government-monopolized student loan market.
Amidst theatrics in which both sides claim to be advocates for students, the reality is, neither Republicans nor Democrats are doing young people any favors. The deal that the Senate has reached retroactively sets rates through the 2015 academic year at 3.86%, and puts a future cap on undergraduate rates at 8.25%.
But none of this addresses the fact that the cost of college tuition has skyrocketed, even though the explanation as to why isn't complicated. When politicians decided that promoting access to a college education was a worthy goal — which it is — they worked to institute the federal loan programs that would provide artificially low interest rates.
Naturally, institutions of higher education responded to the market incentive put in place by this development, and costs have steadily increased. In fact, in 1982, average yearly tuition was just $3,951 per year. Today, the median yearly cost is $23,006. Adjusting for inflation, current costs should be $9,400 each year, but the price has nearly tripled.
Working to make the dream of a college degree a reality for all desiring one is a noble and necessary pursuit. But ultimately, results matter more than intentions. Unfortunately, in an attempt to make higher education more affordable and accessible, politicians have made it more expensive and less meaningful. After all, 48% of college graduates say they work in a field that doesn't require their degree — and this doesn't even account for the overall youth unemployment rate of 16.1%.
By working to expand what already essentially amounts to a government monopoly in the student loan market, Washington has unquestionably failed my generation. It's clear that politicians are putting partisan demagoguery before good policy — and millennials are suffering the consequences.