The Senate finally reached a bipartisan deal last week to reduce and contain student loan rates. The House should promptly approve the measure; Congress allowed loan rates to double this month because it couldn’t get its act together.
The Senate plan would cap federal Stafford loans, subsidized and unsubsidized, at 3.86 percent. They are now at 6.8 percent. Under the deal, undergraduates would pay at a rate tied to the interest rate on Treasury notes, plus 2.05 percentage points.
Graduate students would pay a little more. Loans to parents of students would cost a little more. The rates can rise, and the caps are in the range of 8 to 10 percent.
That’s not great. This bill, in the view of senators who voted against it, such as Democrats Sherrod Brown of Ohio and Debbie Stabenow of Michigan, is a capitulation to the Republican-controlled House, which has passed a similar bill.
Why should any lawmaker want students and their parents to pay more? Why shouldn’t everyone want students to be able to pursue higher education without worrying about excessive loan debt?
But if there must be a compromise, this one is reasonable and far better than current rates. The Senate agreement suggests Congress can get things done when there is the political will and when ideology and egos go in the hip pocket.
It also helps if there is a defined and engaged constituency. Students, and their parents, burdened by student loans, are a discrete, and vocal, interest group.
And who twisted arms and made this deal happen, as liberals groused? President Obama, who is often portrayed in national media as aloof or incapable of playing power politics. Now, how about some action on immigration reform, the budget deficit, and gun control?