Should the Lower Interest Rate on Stafford Loans Be Extended?
President Obama toured college campuses this week speaking on the issue of student loan interest rates in what critics say was a partisan appeal to the youth vote. The current interest rate on federal Stafford loans is set to double—from 3.4 percent to 6.8 percent—July 1, as legislation from 2007 to reduce the rate expires. Obama is asking Congress to extend the lower rate another year to help young people pay off student debt, particularly as half of all college graduates leave school unemployed or underemployed. Opponents of the measure, which is expected to cost the government around $6 billion, say the government-subsidized extension will be paid for by tax hikes that would jeopardize the weak economic recovery. Should the lower interest rate on Stafford loans extended? Here is Debate Club’s take:
The Arguments
Yes — Extend the low rates for Stafford loans rather than just giving millionaires more tax cuts
GARY PETERS, Member of the U.S. House of Representatives Comment
No — Lawmakers should make it possible for overwhelmed student borrowers to discharge private loans
AMY LAITINEN, Senior Policy Analyst at Education Sector Comment (17)
No — Charging below-market interest rates on student loans is an inefficient way to encourage college enrollment
MATTHEW M. CHINGOS, Fellow at the Brown Center on Education Policy at the Brookings Institution Comment (1)
No — Sounds like a risky proposition for taxpayers to invest $6 billion next year for kids who can't pay back the loans
BRIAN DARLING, Senior Fellow for Government Studies at the Heritage Foundation Comment (7)
No — Higher rates would encourage potential students to think a little harder about borrowing money for school
NEAL MCCLUSKEY, Associate Director of the Cato Institute's Center for Educational Freedom Comment (11)
