Yesterday, the President proposed to lower the percentage of one’s income you must pay on your federal student loans. Currently, payments on student loans are capped at 15 percent of income, and the new rate would be 10%. It is a fine idea, and coupled with the President’s earlier proposal to get banks out of the student loan business, where they make a risk-free windfall at taxpayer expense, it shows the kind of below-the-radar good policies the administration is pursuing.
He needs to go further. I know that the centerpiece of his state of the Union speech tomorrow night is evidently going to be a freeze on domestic discretionary spending. But, he should find some programs to kill, preferably in the districts of those who opposed health care reform, and pump the money into additional funding for college loan programs. Acknowledging the need to restrain government spending should never entail eating your seed corn, and investments in America’s higher education system undoubtedly reaps rewards for years to come.
There is an additional reason to encourage students to stay in college, or to enter it, at this time: The job market stinks. Now is the perfect time to encourage young people to forego looking for a job and get a degree, undergraduate or graduate. Students do not show up on the unemployment rolls. I am thinking there are some federal projects in Republican Whip Eric Kantor’s district that could be put on the chopping block in exchange for some additional student loan money.