The key to a great life is a good education. But paying for a college education is tough. Many families are taking out second mortgages. Some are putting-off deserved vacations. Others are telling their kids they just can’t afford to attend the school of their choice.
I know how hard paying for college can be. I received scholarships and Pell grants. I also took out loans and worked my way through school by collecting garbage, waiting tables and umpiring baseball games. It wasn’t easy. But it was worth it.
What makes this country great is that my story is not exceptional. This summer, more than 9 million undergraduates will take out a federal student loan. That’s nine million Americans at the start of their journey who will be borrowing on average $24,000 over four years to make a down payment on their American Dream.
Unfortunately, in just three weeks, interest rates on federal student loans are set to double, from 3.4 percent to 6.8 percent. This rate hike will force students to pay hundreds of dollars more over the life of their loans. No one wants this to happen.
The House has acted to stop the rate hike. Our proposal will reduce rates immediately for most borrowers and get Washington politicians out of the business of arbitrarily setting interest rates. Our plan protects students by putting a cap on the maximum interest rate while giving them the lowest market rates available. There have been times in recent years when you could get a used car loan cheaper than a student loan. That’s not right.
Taking the politics out of student loans is a common-sense fix. It’s a plan that mirrors a proposal in President Obama’s budget. Unfortunately, rather than seek consensus, the president called a campaign-style press conference in the Rose Garden to denounce a plan that he himself proposed just weeks ago. The Senate has failed to act.
The pending student loan interest rate hike is a pressing problem that needs to be solved now. But, it is one of many economic challenges that we face. The effective unemployment rate among young people in America today is 16 percent. That is way too high.
Our young people deserve better. They deserve a government that lives within its means and stops spending money that we don’t have. They deserve their chance to get a good paying job and live the American dream. And, they deserve leaders who will work together for this future. A good start would be to stop the student loan interest rate hike.
Luke Messer is the representative for Indiana’s 6th Congressional District and serves on the U.S. House Budget Committe