Mitt Romney has plucked a campaign theme out of President Obama’s arsenal by going against general GOP feeling and asking Congress to extend the federal subsidy on Stafford loans for college grads. Without the extension the 3.4% interest rate on these loans will double to 6.8%, as agreed in 2007 by a Democrat-led Congress. Many Republicans are unhappy with prospect of an extension, partly because it comes at the cost of $5.6 billion a year, and partly for ideological reason; the existence of the subsidy is an overt manifestation of government interference in education and the student loan business.
“President Obama’s failed leadership on the economy has led to the weakest recovery since the Great Depression, where 50% of recent college graduates are unemployed or underemployed,” said a statement from Romney.
“I encourage Congress to temporarily extend the current low rate on subsidized undergraduate Stafford loans,” he said.
Romney’s pre-emptive acceptance of what was assured to be an Obama campaign platform in his forthcoming tour of North Carolina, Colorado and Iowa, seeks to remove higher education as a majorly divisive issue and assure that he doesn’t lose support of students and their families. It also keeps the election campaign focused on the economy.
While undoubtedly being a shrewd political move, Romney is already being accused of playing fiscally irresponsible games by some of his GOP colleagues.
From US Rep. John Kline:
“Bad policy based on lofty campaign promises has put us in an untenable situation. We must now choose between allowing interest rates to rise or piling billions of dollars on the backs of taxpayers. I have serious concerns about any proposal that simply kicks the can down the road and creates more uncertainty in the long run – which is what put us in this situation in the first place. My colleagues and I are exploring options in hopes of finding a responsible solution that serves borrowers and taxpayers equally well.”
There is growing concern that since 2007, a ‘do-it-later’ attitude has developed over the politically inconvenient problem. More promises now to delay increases for four more years, will simply delay a decision until the next election cycle when once again no one will be willing to address a problem that will cost them votes. In the meantime it is costing nearly $6 billion a year and there have been no plans offered to provide a means with which to pay for this expense.