There’s a bit in the first Spiderman movie where a villain, the Green Goblin, dangles the hero’s crush and a bus full of children off a bridge. Watching conservative tactics on student loans, I can’t help but hear the Green Goblin’s taunts about being the twisted psycho who offers a sadistic choice. Student debt has been in the headlinesrecently as a threat to the fragile recovery, but instead of taking straightforward action to fix it, conservatives in Congress have offered a trade: cut health care funds or watch student debt increase. Make your choice, Spiderman.
Unless Congress acts by the beginning of July, interest rates for federal student loans go up. In Minnesota, that’s projected to cause a $1000 a year average debt increase for 207,000 students. Nationally, about 7 million students are likely to be affected.
Student debt has already passed credit card debt and is a source of worry for those tracking our economy’s recovery. The amount of debt decreases new home purchases and drains resources from parents or other family members who are helping students. Many parents have co-signed on student debt and are at risk in case of default. That kind of default is made more likely the higher we let the debt load go.
Conservatives at first justified their failure to act with the usual reason: They don’t want to pay for it. Sensing that public opinion might be turning against them, they’ve challenged the President to sign a bill that would keep loan interest low but would slash money from a health care fund.
You’d think we’d have learned our lesson about letting debt bubbles grow too big by now. Especially coming after the collapse of the housing and mortgage bubble, can we really afford to risk further collapse from student loans?
If helping students go to college weren’t enough, concern about the long-term health of our economy should be a sufficient motivator for those in Congress to act without playing supervillain. I understand that conservatives may have political reasons for the maneuver, but this is too minor a part of the federal budget with too big a set of possible negative consequences for that kind of nonsense. This shouldn’t be a tough issue.