Subsidize Students, Not Tax Cuts
A spot-on NYT editorial:
April 24, 2012
Subsidize Students, Not Tax Cuts
In 2007, President George W. Bush signed a bill that cut in half interest rates on subsidized student loans until 2012. Those low rates will expire on July 1 — going back to 6.8 percent from 3.4 percent — and, to prevent college from becoming even more unaffordable for millions of students, the obvious move is to renew them. But nothing is that easy or sensible anymore in Washington, where House Republicans are far more interested in cutting taxes, largely for the rich, than they are in helping low- and middle-income students get a college education.
House Republicans say the country cannot afford the $6 billion a year that it costs to pay for the lower rates. The Ryan budget, recently approved by the House, would allow the rates to double, and, at the same time, would cut taxes by $10 trillion over a decade. Representative John Kline Jr., the chairman of the House Committee on Education and the Workforce, said keeping the rates low would mean "piling billions of dollars on the backs of taxpayers."
Instead, Republicans would rather pile that burden on the backs of taxpayers-to-be, specifically the 7.4 million students who now have federally subsidized Stafford loans and the millions more who will need them. At a time when many graduates are desperate for jobs, the interest rate increase would add an average of $1,000 a year to their debt. Already, many Republican lawmakers around the country have made it clear that they don't even want students to vote, imposing identification requirements that would keep students away from polling places.
In the first of several speeches about the cost of higher education, President Obama urged students on Tuesday to demand that Congress renew the rates. "At this make-or-break moment for the middle class," he said at the University of North Carolina at Chapel Hill, "we've got to make sure that you're not saddled with debt before you even get started in life."
Nothing is more important to this country's future than ensuring a good education for coming generations. The issue also plays directly into Mr. Obama's own need to re-energize younger voters, who turned out in overwhelming numbers for him in 2008 but seem far less enthusiastic these days.
Once the White House began its effort, Mitt Romney broke with House Republicans and said Monday that he supports renewing the loan subsidies. As usual, though, that also meant breaking with himself, since he had fully embraced the House budget and never expressed any reservations about the student loan provisions. Indeed, only a few months ago, he argued repeatedly in interviews that student subsidies were a bad idea that encouraged colleges to raise their tuition.
Mr. Romney, along with the Senate Republican leader, Mitch McConnell, said that the $6 billion cost of the subsidy should be offset with cuts to other programs, but predictably neither man said where those cuts should come from. The White House and Democrats have proposed raising the money by ending a loophole used by high-paid employees of S-corporations to avoid paying full payroll taxes.
The Republican response to that idea is also predictable. This is a party that shows time and again that it wants to protect only those who have made it, not help those struggling to get started.