Recently the Senate debated the Democrats’ student loan proposal, which was nothing more than a partisan, political stunt that would raise individual income taxes and increase our federal debt, only to benefit former students with a $1-a-day subsidy on their old student loans.
The average college graduate with a four year degree has about $27,000 in student loan debt. According to the Congressional Research Service, refinancing under the Democrats’ proposal would save the borrower about $1 a day, at the cost of $72 billion in higher income taxes and an additional $420 billion in federal debt. Republicans would rather offer real solutions that help students learn what they need to know and get a good job.
Last year, we worked together in a bipartisan way to cut interest rates nearly in half on all new undergraduate student loans, which are 85 percent of all student borrowers, at no cost to taxpayers. We should be working together to solve the real student debt problem, which has been overcomplicated with too many student loan repayment programs and excessive borrowing. We should not have wasted time on a political stunt that interrupted a serious discussion in the education committee on reauthorizing the Higher Education Act, the same kind of discussion that produced last year’s success. As the leading Republican on that committee, I would like Republicans to have the opportunity to offer their proposals so we can create more good jobs and better schools.
The Democrats’ proposal is unfair to students, taxpayers, and future generations. It treats former students with old loans better than current or future students because it freezes interest rates on old loans, but interest rates on loans for new students may rise as market prices rise. It is unfair to taxpayers because it costs them $58 billion over 10 years, and that number doesn’t fully take into account the risk that students might not pay back their loans. In addition, it affects future generations by adding up to $420 billion to our already out-of-control federal debt. Students don’t need a $1-a-day subsidy; they need a good job to pay off these loans.
Republicans are ready to offer and debate our proposals for better schools, which mean higher college graduation rates, which lead to better jobs for graduates. The best way to prepare students to graduate college in four years or less and to keep their education costs low is to raise standards, improve tests, fix failing schools, and evaluate and reward outstanding teachers. Republicans want to fix No Child Left Behind and reverse the Democrats’ trend toward a “National School Board.” We are also ready to address the real problems with student loans and offer our real solutions so more students can take advantage of federal financing for their higher education and ultimately get better jobs to repay these loans.
Rather than wasting any more time on this political stunt, the Senate should send this proposal to the education committee, so we can continue this discussion and work in a bipartisan manner to create better schools and better jobs.