Today, President Obama paid a visit to the University of Iowa as a part of his tour this week on college affordability. It was largely the same speech he gave to the University of North Carolina-Chapel Hill yesterday, but it’s still important to discuss the abundance of fallacies, mistruths, and flat-out lies woven into his rhetoric of “don’t double my rate.”
What he’s talking about is a piece of legislation passed in 2007 that lowered interest rates for federally-subsidized Stafford student loans by half from 6.8 percent to 3.4 percent, which is set to expire July 1 if Congress takes no action. Nevermind the fact that then-Senator Obama didn’t think it was important enough to vote on–now’s the time to get on board!
And if Congress (read: “the House,” in his mind, because, uh, those evil Republicans!) doesn’t act, higher education will become instantly unaffordable for millions of hardworking students who just want to succeed. Nevermind the fact that the Democrat majority at the time of the bill’s passage intentionally let it expire during an election year. Nevermind the fact that President Bush signed it into law with no issue whatsoever. If there’s anytime to blame George W. Bush for your supposed problems, Barack, it would be now.
The problem is federal intrusion in the loan industry to begin with. It has given colleges and universities the rationale to raise tuition as high as they want, because they know that Uncle Sam is effectively setting a price floor subsidy that is guaranteed no matter what. That’s not the “evil banks” raping and pillaging the pockets of unprivileged families, that’s the collegiate presidents and un-firable professors.
When you’re talking about student loan debts that are, on average, according to President Obama, “$25,000” among graduates, the difference is an increase by $850 on average if the rate cuts aren’t extended. I’m going to go out on a limb and say that if you’re struggling to pay your $25K worth of debt, you’re not going to be in much more peril by adding less than $1000 on top of that.
The issue shouldn’t be “don’t double my rate,” but rather “don’t double my principle.” The average tuition at a 4-year private institution during the 2007-2008 school year was $32,307. Today, it’s $42,224. And the trends are similar with public, state-owned institutions.
Again, it’s pertinent to know that any action or inaction here only affects federally-subsidized Stafford student loans, not unsubsidized ones or private variable rate loans. If these rates expire, it puts them on par with the next lowest student loan rate in the country: the unsubsidized Stafford student loans. This is indicative of the entire Obama presidency, where subsidies are lauded but tax cuts, breaks, or loopholes are demonized–despite that any comparison between the two is comparing apples and oranges.
So, Mr. President, is it really federally-subsidized Stafford student loan rates that we should be talking about? If you want to talk about #DontDoubleMyRate–as your Twitter robots tried to spread this week, only to have conservatives hijack it–then let’s talk #DontDoubleMyRate:
- National average gas price during the Obama presidency? $1.79 on January 20, 2009 to $3.82 today. #DontDoubleMyRate
- Long-term unemployment during the Obama presidency? 2.7 million on January 20, 2009 to 5.3 million today. #DontDoubleMyRate
- Number of people on food stamps during the Obama presidency? 37.1 million in December 2008 to 47 million today. #DontDoubleMyRate
- National debt accumulated during the Obama presidency? $4.93 trillion from 2001-2008 to $5 trillion from 2009 through today. #DontDoubleMyRate
I have a sneaking suspicion that those facts cost a bit more than $850.
Let’s get real and start having a conversation based on reality rather than distractions and distortions.