Senator Elizabeth Warren has been a fierce advocate for students in the political standoff over rising loan rates. She has reframed the debate, asking important questions — more recently echoed by her new colleague Ed Markey — about the billions of dollars the government makes annually off student loans. Both Massachusetts senators pledged this week to block an emerging deal because, they say, it will do little to lower those profits. But for the sake of students who are suffering under Congress’s failure to deal with the loan crisis, this deal — the most realistic bipartisan compromise — should go forward.
College students across the country have been holding their breath the past three weeks as federal lawmakers work to undo a rate hike for subsidized Stafford loans that took effect July 1. Rates for new loans doubled from 3.4 percent to 6.8 percent. Under the Senate deal, such rates would fall to 3.9 percent for undergraduates, for the life of the loan. For graduate students and parents borrowing for their children, rates would be slightly higher. All rates would be pegged to the 10-year Treasury note, which could increase as the economy improves, although the deal caps undergrad rates at 8.5 percent. What’s more, the deal offers clarity to future borrowers by taking the setting of rates out of the hands of Congress.
It’ll take more than one compromise to ease the debt burden on college graduates. Total student debt is now close to $1.2 trillion. Yet the compromise is fair. Despite their noble intentions, Warren and Markey shouldn’t hold up the only relief in sight for today’s student borrowers.