Democrats Quick to Help Students—Sort Of

by Peter Lauterborn, 2007-01-19

In late November 2006, I wrote about how the Democrats absolutely had to use their new majority in Congress to make good on their campaign pledge to ease the financial burdens of going to college. It appears that the Democrats are following through on their promise—sort of.

As part of their initial batch of legislative initiatives, the U.S. House of Representatives passed a plan which will cut the interest rate on student loans in half over five years. While this does not address grants, a flawed application process, or issues of equity, this proposal will go a long way toward supporting a better-educated and less indebted society. Currently, students pay an interest rate of 6.8 percent. Loans are open to a wide array of students, covering cross-sections of American society. The bill will only help students who graduate from university.

The benefits of a well-educated population are well known. As the world economy expands, the need to compete with a talent pool as deep as the world is large, Americans are falling behind in all aspects of education. China was noted for graduating more English-speaking engineers that America, for example. An educated workforce will go a long way toward addressing the great challenges of our era, including renewable energy, maintaining a productive economy and producing more competent political leaders.

The importance of education, however, means that simply cutting interest rates is not nearly enough to truly assist in educating its poor and middles classes.

Major increases in the number of Pell Grants—called “free money”—is drastically needed. Even Education Secretary Margaret Spellings of the Bush administration has called for an increase in the grants, which can cover all of a student’s tuition and personal needs while in school. The truth is that many university students will have trouble paying back their student loans no matter what the interest rate is.

In addition, the Pell Grants are useless if attending any notable school, as the maximum grant is $4,050 per year. Moreover, the application process is so difficult—even for students in supportive families—that a great many deserving students are not allowed the necessary funds.

It could be that the Democrats are tying to test the political waters surrounding financial aid before doing more. Lowering the interest rates is considered a relatively safe move. But while the bill is expected to pass through the House with ease, it is expected to garner mild resistance in the Senate.

But after the decisive minimum wage vote last week, there are clear signs that Democrats are taking quick actions on issues that truly help out the middle and working classes. Their initial fortnight in power has been a successful one. The hope is that by passing uncontroversial yet substantial pieces of legislation, Democrats can build enough political capital to stay in power and the move to truly push out society forward.

This is their chance to prove themselves to a hungry society.