Follow-Up Friday: Student Loan Interest Rate Doubles
The Atlantic’s Jordan Weissmann is challenging what he calls the “conspiracy theory” being floated by some Republicans regarding the doubling of the interest rate on a key federal student loan, which took effect July 1.Weissmann says there’s an attempt to turn younger voters against Democrats by inaccurately blaming the rate hike on the need to fund Obamacare.
From Weissmann’s post:
This is an absurd vision of recent history that many Republicans, including Senate Minority Leader Mitch McConnell, have embraced. It conveniently ignores what the student loan reforms included in the health care bill actually accomplished: Saving billions by ending subsidies to big banks.
For more on other options for dealing with student loan debt, check out the recent EWA webinar explaining the new federal “Pay as You Earn” income-based repayment program. The New York Times reported this week that Oregon is also considering a plan to let students learn now and pay later. The idea has gathered steam — and bipartisan support — at a pace that’s surprised even some of its proponents.
“When we talked to legislators, conservatives said it appealed to them because it’s a contract between the student and the state, so they see it as a transaction, not as a grant,” Nathan E. Hunt, one of the students who proposed the plan, told the New York Times.
In the meantime, Education Sector has an interesting new report which contends the feds are falling short when it comes to tracking and reporting student loan default rates. Without accurate data, finding solutions to the problem becomes that much murkier, Ed Sector argues.