Unless Congress intervenes, interest rates on new government-subsidized Stafford Loans will double on July 1, leaving low-income students to foot an extra charge of roughly $1,000. Republicans, congressional Democrats, and the Obama administration have competing proposals to head off the hike. A bipartisan deal to find a market-based fix would be preferable to what happened last June, when the decision was simply pushed off by a year.
The best answer may require some give-and-take. The first priority should go to taking control of rates out of the hands of Congress. Pegging interest to a market rate — for instance, the 10-year Treasury note, as President Obama and House Republicans have proposed — would prevent what has become a frustrating annual standoff.