With interest rates on student loans set to rise this summer, the topic of how to keep college affordable is staking a claim in the political landscape of the 2012 elections. Ninety-four percent of students borrow to attend college and there is more than $1 trillion in outstanding debt, making this an issue that touches all corners Massachusetts, the country as a whole, and my generation in particular. There is, however, a right and a wrong way to go about solving the current student loan crisis.
The right way, which Scott Brown is advocating, is financing the extension of the lowered rate on student loans by cutting inefficiencies in the U.S. bureaucracy. Brown is putting forth a bill which would include a “Do Not Pay List” to decrease improperly paid benefits—money that is either sent to the wrong person, or money given in the incorrect amount. This program would raise the $6 billion necessary to fund the extension of current student loan rates without raising taxes, which brings us to the “Warren method.”
Like all liberal plans, the means through which Elizabeth Warren would fund the decreased student loan rate is through a tax increase. Sorry if this was shocking, as most news outlets forget to inform their audience that this is the crux of the Democrats’ proposal. She supports an increase in payroll taxes, specifically, the type of tax that is most likely to discourage business from hiring new employees. Talk about counterproductive; this payroll tax increase would only exacerbate the primary issue behind the student loan crisis, which is the inability of college graduates to find employment in this dismal job market. As Senator Brown said, the Democrats’ bill is little more than a “political stunt.”
While colleges need to explore ways to keep education costs low and families should be cognizant of taking on burdensome debt in choosing expensive private schools over less expensive public options, there is a solution to the immediate problem of the interest rate increase on student loans. The Senate should look to Scott Brown for rare leadership on the issue, as his bill provides a means to extend lowered interest rates on loans without raising taxes while simultaneously fixing the problem of improper government benefits.