President Obama will speak this afternoon at the University of Colorado Boulder, part of a swing-state campus tour designed to pressure Congress into extending low-interest rates on federal student loans. The rates are set to double in July.
“There was no other way for me to go to school than to take out student loans,” Brittni Hernandez, CU-Boulder student body president, told reporters Monday. “Like many students, I’m worried that if the interest rate doubles, I won’t be able to afford to finish school. We shouldn’t have to sign away our future financial security just to get a degree.”
If Congress fails to act, the rates for federal Stafford loans, the flagship government student loans, are set to jump from 3.4 percent to 6.8 percent . Sources told reporters that roughly 167,000 Colorado students would be affected, the new rates adding about $1,000 to the annual cost of a typical loan.
The debate over the interest-rate extension is the latest charged subject in the larger battle over government spending and deficit reduction.
An Associated Press study last year found job openings for young Americans with undergraduate degrees fell to the lowest level in a decade.
But lawmakers are also desperate to pay down the deficit and Republicans have targeted discretionary spending like the kind that middle- and low-income students depend on to pay for college. The budget plan put forward by Wisconsin Congressman Paul Ryan and backed by House Republicans, for example, would allow the loan interest rates to lapse, earning the government roughly $6 billion a year.
Republican presidential frontrunner Mitt Romney has strongly endorsed the Ryan budget but this week he joined Obama and Democratic lawmakers in calling on Congress to extend the lower Stafford loan rates.
Yet Obama is sure to win over voters by championing the issue– and not just with students but also with parents paying tuition bills and adults well into their professional lives who are still doling out monthly for their own education and painfully aware how much interest rates matter.
Indeed, despite the fact that they agree on this issue, the student loan debate highlights the different life experiences of Obama and Romney in a way that also boldfaces narratives about the divergent priorities of the Democratic and Republican parties in the era of outsized corporate bonus culture and Occupy Wall Street protest.
Whereas Romney was born to wealth and didn’t have to take out student loans to attend university, Obama and his wife once owed more in student loans than they did on their mortgage and only paid off their student loans in 2006 with royalties from Obama’s bestselling books.
“I feel like the president is standing in solidarity with us,” Hernandez said. “He had student loans. He paid them off… All the students who will be lined up in front and behind him [when he speaks on campus] will be loan borrowers. He knows we have to invest in young people.”
Romney has been vocal on the issue of student loans in the past and, as the Obama for America campaign team was quick to point out Monday, up until now, he has not sounded like a man in favor of student loans in general, much less low-rate student loans.
“Romney has endorsed the Ryan budget, which would make deep cuts to Pell Grants and allow student loan rates to double, and last week he said he would gut the Department of Education to pay for his tax plan,” Obama campaign spokeswoman Lis Smith said. “Today we heard yet another—and contradictory—position from Romney on student loans. As the list of promises Mitt Romney has made to the American people gets longer… the numbers just don’t add up. The real question is whether Mitt Romney is being honest about his agenda and, if so, whether he will come clean about the necessarily painful cuts he would have to make to meet all of his promises.”
Romney has endorsed a free-market approach to education, suggesting students should shop around for lower tuition rates. He told the Ames Tribune editorial board in December that he thinks student loans work to drive up the cost of higher education.
“If the government starts writing checks for people to go to a university, [the universities] will just keep raising their rates because there will be no incentive to say ‘We’ll have to hold our rates down in order to attract the best students.'”
[ Image of CU-Boulder preparations for Obama event via Troy Hooper ]