The GOP threw students a bone: an 8.5% interest rate cap.
But they're only 3.4% right now. What gives? That should have read, "threw students under the bus."
House Republicans want to peg student loan interest rates to what the federal government pays to borrow money. Show of hands: who thinks that's responsible? No one? Good. Since the GOP took the House in 2010, GOP extremism has created several crises that have had real impacts on the economy:
The cost of borrowing for the federal government went up by $1.3 billion in 2011 after the debt ceiling crisis. The fight over the debt ceiling also resulted in the country's credit rating being lowered, and overall economic confidence suffered. This makes the House bill a very worrying sign for students looking to borrow money in the future.
Culture of economic showdowns would increase costs for students
Yet, in a move to "help" students, they want to tie Stafford loan interest rates to the cost of borrowing. But wait! Luckily for us, they capped the interest rate at 8.5%, which is two and a half times larger than the 3.4% students pay now. With this plan potentially costing students up to $2,000 more than if rates simply doubled as scheduled, it really looks like the GOP is willing to throw students under the bus. If nothing else, this should be a reason the GOP re-brand isn't going very well.
We already know that we can't trust the GOP with the economy. How can we trust them with our interest rates?
It's going to take action to repeal the Monsanto Protection Act
Monsanto has a long history of getting what it wants, and being able to ignore court orders brings their hold on Washington to an entirely new level.
The agricultural and biotech company that produces herbicides, pesticides, and seeds is at the forefront of this country's food industry, and when the amendment commonly known as the Monsanto Protection Act secretly became law, protections for farmers, the environment, and human health went out the window in favor of making life easier for Monsanto.
The implication of the Monsanto Protection Act spelled out by Sen. Bernie Sanders:
“Essentially, what that Monsanto Protection Act rider said is that even if a court were to determine that a particular product might be harmful to human beings or harmful to the environment, the Department of Agriculture could not stop the production of that product once it is in the ground... So you have deregulated the GMO industry from court oversight, which is really not what America is about.” (Source )
More from Sanders:
Sen. Merkley has also been outspoken on the issue. He has already attempted to introduce an amendment that was blocked by the Senate GOP to repeal the Monstanto Protection Act. From Merkley's website:
The Monsanto Protection Act is an outrageous example of a special interest loophole,” said Merkley. “This provision nullifies the actions of a court that is enforcing the law to protect farmers, the environment and public health. That is unacceptable.” To avoid public scrutiny, the “Monsanto Protection Act” was quietly and anonymously inserted into the continuing resolution passed this March to avert a government shutdown.
We can't take the risk of Monstanto having free reign over our food
Getting people to take risks and spend money is a powerful, fundamental way to spur economic growth, but what if college graduates simply cannot take those risks? There's $1.1 trillion in college debt in the US, and that's leaving millions of new graduates every year with a negative worth that makes access to credit even more difficult.
Huge decisions are often left up in the air, like abstractions that have no place in reality. Decisions like buying a car or owning a home are often put aside by young people, but marriage?
As a society we are encouraged to get married. The tax-code is rigged in favor of married couples, the "nuclear family" of parents with children is supposed to be as important as apple pie, and the entire debate around marriage equality has shown that we, as a society, really care about marriage.
Add in the complications of college debt, and you might as well make marriage as abstract and unlikely as owning a home or a car.
No house, no car, no happy marriage with kids. It's just too expensive, and Nobel Prize winning economist Joseph Stiglitz has pointed out that student loan debt has effectively crushed the American dream.
Curbing student debt is tantamount to curbing social and economic opportunity. College graduates earn $12,000 more per year than those without college degrees; the gap has almost tripled just since 1980. Our economy is increasingly reliant on knowledge-related industries. No matter what happens with currency wars and trade balances, the United States is not going to return to making textiles. Unemployment rates among college graduates are much lower than among those with only a high school diploma. -Stiglitz
The case for a college education is made very clear: in order to stay competitive in an increasingly complex world, we must be educated. We cannot go back to the old means of production and can't rely on cheap manufacturing to stay caught up. Developing human capital is absolutely necessary.
But if we spend so much on college, how can this developed human capital move forward? Marriage, despite being raised to such a high standard and being a valued tradition for everyone to fight for, is representative of what young graduates saddled with debt are incapable of attaining.
Two educated people wanting to get married could share $53,200 in debt before they cut the cake
Assuming they get married after college, and they each share the average student debt, AND they have an average wedding. That's the shared debt before even considering a home, a car, or anything else.
Educated couples have to keep delaying important moments of their life, or take the risk of sharing the debts of a spouse, which can run much, much higher than the average. A med school student can run over $100,000 in debt.
Curtailing the day-to-day repercussions of loan debt is necessary to allow graduates to pursue their lives and enter the economy. Stiglitz again :
"Student debt also is a drag on the slow recovery that began in 2009. By dampening consumption, it hinders economic growth. It is also holding back recovery in real estate, the sector where the Great Recession started."
Stiglitz credits Elizabeth Warren for thinking outside the box on how to tackle the overall problem of student loans, too.
"If the Federal Reserve is willing to lend to the banks that caused the crisis at just 0.75 percent, shouldn’t it be willing to lend to students, who will be crucial to our long-term recovery, at an appropriately low rate? The government shouldn’t be profiting from our poorest while subsidizing our richest."
A Nobel Prize winning economist knows that college students need a fair shake with student loans. Doubling the interest rates on Stafford Loans are only going to add more total debt to students and drag them further into debt, forcing them to put off important economic and life decisions even longer.
Thanks to the hard work of DFA members, our work to protect our students just got a huge boost.
Senators Tammy Baldwin and Kirsten Gillibrand have signed onto our campaign to keep student loan interest rates from doubling -- joining more than 100,000 other Democracy for America members demanding we treat our students as well as the big Wall Street banks.
As the parent of two college graduates, I know exactly how much of a burden paying for higher education has become for so many students and families. It is a disgrace that Congress could even consider raising student loan rates at a time when an entire generation's economic opportunities have been blown up by the Wall Street recession.
That's why Tammy's and Kirsten's support couldn't have come at a better time for students across the country. Without Congressional action, federal student loan rates will skyrocket to 6.8% --all while the federal government gives money to the big Wall Street banks for a piddling 0.75% interest. That's a 900% discount for the same banks that wrecked our economy in the first place.
DFA members worked their hearts out to put Tammy and Kirsten in the Senate. Now they're doing exactly what we elected them to do: Going to the mat for America's working families and students.