The financial expense of a university degree was already high enough. Then, on Monday, Congress made it much worse for all but the wealthiest families, essentially doubling student loan interest rates. Seven million U.S. students who rely on subsidized Stafford loans are affected.
It didn't have to come to this.
In 2007 Congress temporarily lowered loan interest rates to 3.4 percent. President Obama signed the bill but asked Congress to come up with a long-term solution. And here we are, six years later, with more than $1 trillion in outstanding collective student loans. Defaults are epidemic, and with the interest rate now at 6.8 percent, things won't improve anytime soon.
In California alone, 550,928 college students have current Stafford loans -- and 51 percent of the state's graduates are in debt, with an average loan obligation at about $25,650.
The student debt problem reverberates well beyond the relationship between student, bank and government. New graduates who face the immediate spectre of loan repayment will be that much less able (or inclined) to contribute to our consumer-driven economy. Americans with student loan debt are 36 percent less likely to own a home, one study says.
The Congress-manufactured repayment problem skirts the real issue: a national commitment to higher education and global competitiveness -- or lack thereof. Business leaders say the U.S. will improve faster as an international player in technology through immigration, not education of homegrown scholars.
Fortunately, Washington can still fix the student loan problem retroactively. The Senate will revisit the issue July 10. It's time -- past time, really -- to make higher education more affordable, not less. Congress needs to drop the posturing and get this done.