President Barack Obama, and his presumed opponent in this year's election, Mitt Romney, does not agree with Congress in allowing this interest rate to revert back to 6.8 percent. Although I am currently in college, I have to disagree with Obama and Romney.
The interest rate is not the real problem. What the government should be focusing on and getting under control is the consistently rising cost of tuition. According to the National Center for Education Statistics, "between 1999-2000 and 2009-10, prices for undergraduate tuition, room, and board at public institutions rose 37 percent, and prices at private institutions rose 25 percent, after adjustment for inflation." Obama should be focusing his attention and sense of urgency on the acceleration of these numbers instead of the interest rate.
The College Student Relief Act of 2007 was made to expire in 2012 due to the $6 billion annual cost to leave it at 3.4 percent. The student loan debt is estimated at $1 trillion, exceeding the debt of credit card loan and auto-loan debt. If student loans were not paid, taking into account the delicate state of our country, we could possibly slip into the "second coming" of the housing crash we experienced in 2008. The focus needs to be lowering college tuition to an amount where 6.8 percent college loans are affordable.
Although I disagree with President Obama on this matter, I fully respect the intestinal fortitude he displayed on stage with Jimmy Fallon.
In Danis' post, Doubling the Interest, he makes a valid argument that could help solve student debt problems.
ReplyDeleteWhile I do believe lowering tuition costs would help the problem, if congress chooses to raise interest rates students would still be spending about the same amount of money on school (mostly in interest rates instead of tuition).
That being said, President Obama has started on a trek to different universities across the country to rally congress to renew the low interest student loan program. In the article posted on The Daily Athenaeum, the writer talks about how Obama himself just got out of student loan debt 8 years ago and how "nobody cares about student loan debt, except for the student." This is exactly right. Students are who needs to be responsible for rallying congress to extend the interest rate student loan program.
I do agree with your approach on the matter, however instead of Obama trying to rally students up to make change maybe he should put the works on lowering tuition in progress. By doing so now, congress would be forced to make a quick decision that either way would not benefit them.