Student Loan Rates Set to Double Because of Democrats’ Intra-Party Disarray

Student loan rates are now poised to double after the Democrat-held Senate went home for the Fourth of July holiday rather than pass a solution. And although the war was ultimately being waged on students, who will now pay more to go to college, the battle was within the Democratic party. Roll Call reports:

“Senate Democrats battled among themselves over student loans Thursday, holding dueling news conferences about the right way to prevent interest rates from doubling in four days.

It was an unusual situation for the party with an issue on which it has typically been united. And the split all but guaranteed that the chamber will blow past the July 1 deadline, when the student loan applicants who receive need-based federal aid will see their interest rates rise from 3.4 percent to 6.8 percent.

But this week’s intraparty division is not especially surprising given that Senate Democrats have been simmering for months over President Barack Obama’s April budget proposal, which included a student loan proposal designed to foster bipartisan agreement. Now, that simmer has heated to a boil. . .”

So to recap: Last year Congress could not arrive at a long-term solution and punted for a year, President Obama decided he’d had enough and issued a market-based student loan proposal in his budget, House Republicans took the rare step of allowing Obama a win and largely accepted his plan and then Senate Democrats refused to act because ____?

Oh yea, because they’re partisan hacks who are more concerned with having the political high ground rather than creating good policy.

In fact, while House Republicans were working on language to put President Obama’s plan into effect, it now appears that Democrats were actively trying to sabotage the process. The Washington Post reports that following the introduction of Obama’s budget, “his fellow Democrats [were left] grousing and trying to thwart those efforts.”

Not all Democrats however. A bipartisan “Gang of Five,” led by Sens. Joe Manchin III (D-WV) and Angus King (I-Maine), who caucuses with the Democrats, unveiled a student loan agreement with Senate Republicans. ABC News reported that the compromise bill “draws from formulas for setting future interest rates that have been proposed by President Obama and House Republicans in a bill they approved last month.”

“This bipartisan agreement not only makes sure student rates will not double on July 1, but this is a long-term fix that will lower rates for all students and will save students $30 billion over the next three years, making sure anyone who wants an education can afford one,” Sen. Manchin said in a statement. “This deal shows the American people that bipartisanship and commonsense are alive in Washington.”

Sadly, they’re alive everywhere except the Senate Democratic caucus. They, led by a group of left-wingers like Sen. Jack Reed (D-RI) and Tom Harkin (D-IA) unveiled their own plan to once again kick the can down the road with a one-year patch at the current rates.

That should be unacceptable to students. As Manchin said after his party’s “plan” was introduced he retorted, “we failed to fix it the first year, we’re notorious for not fixing anything, we’re notorious for kicking the can down the road. We’ve said enough is enough.”

All of this political gamesmanship and one-upmanship makes the perfect case why a long-term solution that takes the government out of the business of setting rates is absolutely necessary. After all, if the President, the Republican House, and a number of sensible Senate Democrats all agree on the core of a proposal, and rates for students still double because nothing can get done, then we have a serious problem. But not as serious as the fact that many students will be left paying dramatically higher rates to go to college. It’s sad that young adults are caught in the fire between dueling factions within the Democrat Party.