Have a massive IOU
to pay off? Well, we have somewhat good news for you.
Back in April, the Voice reported on the impending student loan crisis that would have to be solved before July 1st – the day when the interest rates on 7 million students’ federal loans would double to 6.8%. With the SCOTUS decision overwhelming the media and the contempt vote for Attorney General Eric Holder overwhelming Congress, the issue was more or less ignored and, just yesterday, Nick Pinto reported on the bleakness of the whole situation.
Luckily, a mysterious occurrence happened late yesterday afternoon: Congress got its shit together. In a bipartisan, co-operative, compromising, two-party agreement (any other legislative friendship words we can use?), the House and Senate both passed a bill
with a large majority that will do three things:
1. Keep the interest rates at their present level of 3.4% for another year;
2. Pour money into our roads and bridges, leading to more jobs for workers; and
3. Reauthorize a flood insurance program.
Being friends is great, isn’t it?
As much as we love floods and transportation, our main concern is the first part of the bill concerning the student interest rates. The cost of extending the rate for another year came out to around $6 billion so, to make up the difference, Republicans and Democrats agreed to cut some provisions that protect students from harms’ way. That included the time it takes some students to receive a federal subsidy and a few revisions to the workers’ pensions. But, hey, the money has to come from somewhere… right?
In the April article that we referenced before, we mentioned in it that Congress would tentatively solve the problem by pushing the ball down the road. And that’s exactly what they did here. July 1st, 2013 will bring about the exact same argument; given, the members of Congress might be a bit different but, in general, the situation will be almost exactly the same. It’s an election year, too; the politicians on the Hill knew that strapping students for cash before November is a strategic fail. Now, with this deal in hand, everyone in Congress looks great to young voters! (Unless you didn’t vote for the bill…)
As student loan continues to build up every day – let’s see how far past a trillion dollars we can get! – the deal, however, is a short-term fix for a problem that must be confronted sooner or later. Hopefully, by that time, we’re done paying off our loans.