The Sorry Stafford Panderfest
by Frederick M. Hess • Apr 30, 2012 at 8:31 am
Cross-posted from Education Week
Cross-posted from Education Week
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ShareHidy, all. I'm back. Had my head down, crashing away on the Cage-Busting book manuscript. We'll eventually see how that turned out. Meanwhile, I've been blown away by the quality of the guest-blogging, so a special thanks to Jonathan, Chapman, Robin, and Andrew.
Anyway, let's get back to it, shall we? I've been typically disheartened by the Obama-inspired, now-bipartisan panderfest that's broken out over Stafford loans. For those who've been otherwise occupied, here's a quick recap.
Five years ago, in a piece of cheap political theater, Democrats in Congress wrote an additional sweetener for federally subsidized Stafford loans into the College Cost Reduction and Access Act. Beyond offering college loans at a guaranteed rate of 6.8%, Congress temporarily dropped the undergraduate rate as low as 3.4%. The logic for the fixed 6.8% in the first place was that student advocates were bummed out that interest rates fluctuate and wanted the feds to offer certainty (with the understanding that taxpayers would do well when market rates were low, and that that would hopefully buffer the Treasury against times when market rates were higher). The Bush administration, which never worried about spending a couple billion more bucks, cheerfully went along for the ride.
Now, the temporary 3.4% is set to naturally expire, with undergraduate Stafford loans reverting to the standard
