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Dropping the ball on student loans

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Because Congress couldn't get its act together last month — not really all that surprising given the partisan gridlock in Washington — interest rates on federally subsidized Stafford student loans rose from 3.4 percent to 6.8 percent on Monday. That's bad enough for college students trying to figure out how they will repay the debts they incur to finance their educations. What's worse is that practically nobody in Congress — neither Democrat nor Republican — wanted rates to go that high, yet lawmakers seemed powerless to prevent it.

Democrats and Republicans both agreed the government should continue to subsidize college loans for the country's neediest students. And both sides recognized that making it possible for more students to go to college was over the long term good for both the young people whose earning power would increase as a result of their higher education and good for the U.S. economy. Moreover, even though Democrats and Republicans had slightly different plans for revising the existing college loan program, which was set to expire July 1, neither side proposed raising interest rates anywhere near 6.8 percent.

Yet such was the lawmakers' aversion to even the appearance of compromise that they ended up allowing the student loan rates to double overnight. You can't get much more dysfunctional than that, especially given that the differences between the two parties were minuscule compared to the program's importance for the country. That can hardly bode well for Congress' ability to deal with future questions on which the parties' positions are more divergent.

There was a time not too long ago when relatively minor policy differences such as this would have gotten worked out through the normal give-and-take of the political process. Both sides would have come up with the numbers they wanted and brought them to the table swearing it was their final offer. Then, through the peculiar alchemy involving the usual horse-trading in smoke-filled rooms and political back-slapping that characterizes such negotiations, they would proceed to split their differences and agree on a deal partisans on both sides of the aisle could live with while still getting the nation's business done.

Sadly, that untidy but pragmatic tradition of legislative sausage-making has become a lot rarer in recent years. Today lawmakers come to Washington more intent on showing off the plumage of their ideological purity than on actually governing the country. Thanks to severely gerrymandered districts, many lawmakers' greatest fear is a challenge from an even more rigid ideologue in the next primary election. That means compromise has become not only a dirty word but an electoral death knell for politically ambitious legislators.

As a result, nothing much gets done in Congress, and the country is left the worse for it. As far as student loans go, there are any number of ways Democrats and Republicans could keep college loan rates affordable and reduce the debt students must pay back when they complete their educations. Both parties want to tie interest rates to the 10-year Treasury note or to some other government security, to allow rates to rise gradually as the economy recovers and to cap how much the rate can rise as well as the amount of debt students can assume. Yet they can't seem to pull it off.

Here's a suggestion: If lawmakers can't get it together to craft a workable compromise, let them at least return to another time-honored political tradition by temporarily restoring the status quo ante. It's called "kicking the can down the road," and all that is needed for Congress to reap its benefits is to vote to extend the loan program that expired on Monday for another year when it reconvenes after the July 4 weekend.

It may not be the most politically courageous or admirable course lawmakers can take, but it does have the great virtue of not doing nearly so much harm as their inaction has already accomplished. Meanwhile they can tell the folks back home that they stood up for their principles, and the nation's young people — as well as their parents — will thank them for it.

Copyright © 2014, The Baltimore Sun
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