At the eleventh hour before rates doubled on July 1, the Senate struck a deal to freeze interest rates on government-backed student loans.
In other words, both parties agreed on a $6 billion pander to youth vote. That $6 billion cost was sticking-point for Senators, but after a lot of hand wringing, they decided to pay for it by raising federal pension insurance premiums. In typical Congressional style, to get the freeze passed asap, it’s going to be tacked on to the Highway Bill.
The rate will remain at 3.4%, instead of jumping to 6.8%, saving 7 million students and ex-students from a jump in repayment bills. But the freeze will expire a year from now, so look forward to a renewed “don’t double my rate” campaign in 2013.
Obama campaigned on college campuses warning young people that he was the one who was going to keep their interest rates at 3.4%. He was the candidate of choice for young people. If student rates would have doubled, the average young person with the typical loan balance of $50,000 would have seen an addition $1,700 in interest payments every year.
As young people with outstanding student loans bow to the White House and thank their president, I say are you really paying attention?
Didn’t something else happen that affects young people? Young people who don’t normally buy health insurance?
Oh, that’s right Obama just gave you a tax increase. Not really a tax, but a mandate that’s now called a tax.
For a family of four that tax is going to be $2,400 a year. More than you just dodged with the one year reprieve on the student loan rate increase.
Since so many young people can’t put these two things together, maybe that pricey education wasn’t worth the money. That degree in humanities just doesn’t seem to give you the tools to get a job or figure out your president, the one you love so much, just put the screws back on you.
Unfortunately, neither can the Romney campaign staff.
