Student loan interest rates aren’t the problem

Posted on July 8th, 2013

This commentary from the NY Post sums up the real way Congress has failed students perfectly.

The problem is not just that Congress has hurt students by failing to keep student loan interest rates from doubling to 6.8%. It’s that they have done nothing to prevent college costs from skyrocketing.

Congress’ lack of intervention has made getting an education without taking on significant debt in the form of federal and private loans impossible for the majority of today’s college students.

The real problem: college affordability (or lackthereof)

The post’s author advocates for a market-based system of student loans. Of course, there are downsides to this approach as well. But it’s clear that Congress must address the real issue of college affordability, rather than squabbling over what the student loan interest rate should be.

Low student loan interest rates won’t solve the affordability problem–they may even have the opposite effect of encouraging borrowers to take out even greater debt to pay for college.

Holding colleges accountable for costs

To hold colleges more accountable for their high price tags, the author suggests that colleges should be forced to pick up the tab for students who default on their loans or don’t graduate–an interesting approach that could make universities reconsider before burdening students with additional costs.

Of course, none of these approaches will erase current students’ debt or put a college education within reach without loans for most Americans. But it’s great to see the conversation shifting to addressing the greater problem of college affordability–and holding the government accountable for letting colleges run wild with raising tuition.

Category: College Costs

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