EDUCATION: Plan ahead for loan issue
The average U.S. college student walks off campus with about $26,500 in student loan debt, much of it in government-subsidized low-interest loans. Typically, students have 10 years to pay off the debt.
Members of Congress now are under fire because interest rates on new Stafford loans are increasing to 6.8 percent, up from 3.4 percent. Analysts say that will add about $2,600 to the typical student’s debt load – less than $22 a month on a 10-year repayment.
Largely for political reasons, President Barack Obama and some lawmakers are accusing conservatives in Congress of failing their responsibility to young Americans.
But conservatives worry that the government cannot afford deficit spending on programs such as student loans. They are right.
Consider this: An American college graduate’s share of the national debt is about $53,000 – twice the average student loan burden. And somehow, some way, the national debt will have to be paid, too.
Sen. Joe Manchin, D-W.Va., has an idea on student loans. He wants to tie interest rates to the financial markets. When the economy is sluggish, interest rates are low. When it picks up, they rise.
It is a simple, reasonable idea – yet some are lambasting Manchin over it. He and other fiscal conservatives should ignore the political flak and proceed with the plan.