Stop student loan rate hikes

June 22, 2012

Lois Capps


I wanted to give an update on an important issue that will affect many Central Coast residents and families if it’s not resolved soon.

Without Congressional action student loan interest rates will double on July 1st.

I am adamantly opposed to the doubling of these interest rates and am working to keep it from happening.

In California, more than 572,000 student borrowers would pay nearly a half billion dollars in additional interest payments over the course of one year, if interest rates are allowed to double to 6.8 percent.  This would cost the average student about $1,000 over the course of the loan.

That’s why I’m supporting the Stop the Rate Hike Act of 2012, which would hold interest rates steady at 3.4 percent.  To ensure we don’t increase our deficit, the bill pays for the cost of maintaining the lower interest rate by eliminating unnecessary taxpayer subsidies to large oil and gas companies.

Making sure young people have access to affordable higher education is essential for their success. Too many of them, and their families, are already struggling to pay for college and it would be just plain wrong to let the rates on their loans double.

I know that keeping the interest rates low isn’t a silver bullet to higher education affordability – but it is an important step to containing the growing cost of college, which has been skyrocketing in the wake of devastating state budget cuts.

Ensuring that the cost of attending a public university in California isn’t out of reach for all qualified students and their families will require a renewed commitment to investing in higher education.

Please know that I strongly believe in keeping college affordable, as it is absolutely critical in order to ensure that our country has a strong workforce in today’s global economy.

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Lois, are you listening to your constituency or will you vote your party line like always?

I’m against price-fixing loan rates, even for educational loans. When you artificially lower the interest rate, the principal required to purchase goods and services go up. That’s how macroeconomics works. What that means is that the price of education is going to go up for everyone, and instead of a loan that a student could pay off quickly, they get strapped with a huge principal balance that will burden them for years. If you can’t afford education, instead of burying yourself in debt, try doing something productive in society like getting a job. If you work yourself through college, chances are you’ll appreciate your education more. You might even do something with that college diploma. This country has enough baristas with bachelor’s degrees as it is.

Are you against the Oil Depletion Allowance that is anti-capitalistic ?

So, we are talking about between $2.75 and $7.25 per month increase???? That is going to keeep someone from going to college?

US: The federal government’s largest asset is student loans, bigger than anticipated tax revenues & home mortgages. [Don’t be mislead by the word asset. These are paper assets, which means they are based on accounting estimates and assumptions regarding their value. Many loans will never be paid back and, instead, will become losses – charged to taxpayers, of course. It is not the responsibility of the state to subsidize (or control) education.]

AdvisorPerspectives Posted 2012 Jun 9

These are loans that are already subsidized. Now, we should further subsidize for the 30-year life of the loan? Sounds like both parties are pandering – and we should be afraid because more will stop paying? There’s a solution to that, too. It certainly isn’t because they CAN’T pay, it’s because they WON’T. $1,000 over the life of a loan for a college graduate? Give me a break! The college student needs to believe in themselves and their ability to be productive before they have any right to ask others to believe in them (by means of paying for them). If they don’t believe a thousand dollars worth, they have no right to ask me to.

These students are having a diffucult time with this economy paying back their loans now, i see more students defaulting on paying their loans with the increase. This is our future and the children today will not have a chance to make America better if they keep getting kicked down, when they are trying to better themselves and to be proud to be an American.

From the link above: “Republicans and Democrats actually agree that the rates should stay put, but have different plans to off-set the cost. Republicans want to cut money from President Obama’s healthcare overhaul. While, Democrats want to increase some payroll taxes on top earners and owners of some privately held corporations.” Which party is guilty of “feel good” policies again? The Republicans want to start chipping away at President Obama’s healthcare plan, but how will that play out if the Supreme Court decides to scrap the whole program? Where will the Republicans “cut” then to pay for continuing the student loan interest rate? Republicans have no compunction about having student debt continue to rise, as long as the tax rates for the wealthy stay historically low. If you actually look back in our history, our strongest growth period was during the 50s, 60s and into the 70s when the top earner’s tax rates where at a high rate; as a side note, Republicans were out of power for the most part during our country’s most productive era ever, curious that.

Ah the spin Dr.s are alive and well. Now if you want to look at the Presidents of the time you mentioned, in that thirty year span it is about and even split between Truman, Kennedy, Johnson and lets not forget Jimmy. On the other side Eisenhower, Nixon and Ford.

Now I’m sure your next comment will be that it was a house controlled by your party of choice. O.k. fine. So they then are responsible for Vietnam? How about the gas lines of the seventies? How about the start of Detroit falling out of favor as the premire automaker of the world in the seventies? How about Love Canal, Cleveland Ohio rivers going dead? Pollution? Remember you just said about all the great things so they would also have to be responsible for the bad, right??? I hope you get my point. We can all put on our rose colored glasses to see whatever we want to see while ignoring the rest, right?

Sounds like “feel good” legislation to me, couched in electioneering jargon.

The “unnecessary taxpayer subsidies to large oil and gas companies” presumably keep oil and gas products cheaper for all of us. Ergo, a case could be made that Lois is demanding that we all further underwrite the college educations of the few.

Sounds like a good way to garner votes.

Dear Ms. Capps

As much as $1000 over the life of a student loan may be important to some, I would hope the fiscal Armageddon we are fast approaching is of much greater concern. Where is your support of austerity or at least a ballanced budget? Our baby-boomer generation will soon be handing our children a loan where not even the interest can be paid, much less the loan principle. If I thought you might ralley the congressional troops to this end, I would vote for you, otherwise, no.