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April 16, 2014

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Who’s to blame for student loan debate? For politicians, everyone else

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Leila Navidi

President Barack Obama departs from McCarran Airport in Las Vegas after delivering an energy policy speech at a solar plant in Boulder City on Wednesday, March 21, 2012.

When President Barack Obama takes center stage at UNLV today, he’ll be stumping on student loans and repeating a complaint that’s become a central refrain in his public appearances: Congress’ inefficiency is causing the country problems.

Freezing the interest rate on student loans is one of the five points Obama outlined on a “to do list” he delivered to Congress last month. With little progress made, the president is now reviving his cry of “We Can’t Wait” for Congress by announcing an executive order on student loans that White House officials say would help avoid defaults by better explaining income-based loan repayment options to borrowers.

Policy-wise, Obama’s order won’t solve the problem of soon-to-be-skyrocketing interest rates on student loans or break the stalemate on Capitol Hill that has stymied efforts to keep them low. Even the secretary of education admitted he couldn’t predict how many defaults the changes are expected to help avoid and stressed that Congress really does need to constrain interest rates through legislation.

Politically, however, Obama may get some mileage from once again taking aim at Congress. If there’s one thing Americans are united on in today’s atmosphere of bitter partisan divides, it’s their loathing of the legislative branch.

But Obama’s re-election strategy of attacking Congress puts down-ticket lawmakers — such as Rep. Shelley Berkley, who is in a tight race for Senate — in an awkward position of defending their record without undermining the president’s message.

Talking policy is always a tortuous task in an election year — especially when lawmakers’ ability to actually execute policy is at an all-time low in the deadlocked Congress.

Earlier this year, Congress hit an approval rating of just 10 percent — with both Republicans and Democrats expressing their frustration equally.

But ask each side who is to blame for the unsatisfactory review and the answers are as starkly divided as the inter-party line.

Take the student loans debate. In the past month, Senate Democrats lost a vote on their bill to offset the $6 billion cost of keeping student loan interest rates at 3.4 percent by closing a tax loophole on hedge funds. Senate Republicans lost a vote on their bill to offset it by stripping money from a health care prevention fund.

Now Republicans are petitioning the president with a proposal to pay for student loans with tweaked pieces of his fiscal 2013 budget plan.

With only three weeks to go until rates double on July 1, Democrats are blaming Republicans for the congressional breakdown.

“When in doubt, wave your arms and scream and shout, and that’s what they’re doing,” Nevada Sen. Harry Reid said of the student loan process thus far. “If they want to negotiate in good faith, we’ll do that ... but this is all just a game that’s being played.”

Republicans are blaming Democrats.

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Sen. Dean Heller, Sen. Harry Reid and Rep. Shelley Berkley applaud during a Memorial Day ceremony at the Southern Nevada Veterans Memorial Cemetery in Boulder City Monday, May 30, 2011.

“Instead of compromising, the Democrats want to raise taxes on small business at a time when we need jobs,” Nevada Sen. Dean Heller said of the Democrats’ plan last month, calling their insistence on their bill “further proof that Washington is broken.”

And the White House?

Obama has signaled where his loyalties lie: He threatened to veto the GOP’s student loan bill and didn’t challenge the Democrats. But the White House’s official line is to steer clear of the details — even when the president is being directly petitioned by Republican leaders to get involved — and keep cracking the “We-Can’t-Wait” whip.

“Our view is that Democrats and Republicans on the Hill should sit down and figure out a solution to this, and we’re eager to see that happen before July 1,” White House Domestic Policy Director Cecilia Munoz said Wednesday when asked where the president stands on current student loan proffers circulating around the Hill.

She then deflected the question by giving a hat-tip to her boss.

“The whole reason we’re having this conversation is that the president has made it a priority,” she said.

But while some Democrats in Congress might want to see Obama focus his attacks on Republicans, they’re not exactly frustrated by the president effectively questioning their job performance when he pillories Congress — because they’re doing the same thing.

“He should be saying Republicans are the problem because Republicans are the problem,” Berkley, who is running for the Senate against Heller, said when asked about the president’s focus on Congress’ shortcomings.

But Berkley added that she sympathizes with Obama’s aggravation.

“I’m sitting here, and I have frustration,” Berkley said.

Perhaps the biggest irony in Nevada politics this season is that most of the candidates running on the “Washington is broken” mantra are Washington incumbents. Only in the 3rd Congressional District does an incumbent have a serious challenger who has never served in Congress.

It means, strange as it may sound to hear Washington insiders flog the concept of Washington insiders, that the anti-Congress conversation is safe ground in Nevada — whether you’re a would-be senator or representative or the president.

“Given the gridlock in Congress, it doesn’t hurt for an incumbent to be running against Washington,” said one Nevada Democratic strategist. “That’s something you’re going to see from frankly anybody who is paying attention to the way that voters feel in this current political climate.”

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  1. More of the same from Osama Obama. Why are the 99% subsidizing the soon-to-be 1%? Statistics show college grads will earn far more over their lifetimes than the working class, so why the subsidies? Let them pay their own way and quit making those who earn far less share the cost. Talk about your entitlements! Where are you, "progressives?" This is an outrage but one I believe your kids get the benefit of so you remain unconcerned and silent! End the subsidies!

  2. Interest rates are not the problem...The high cost of going to school is where the problem lies...My nephew graduated with a marketing degree barely 10 years ago for less than 25 grand...And that included a few bucks to live on...Today's marketing grads are saddled with 60 & 70 grand worth of debt and I guarantee you the education isn't any better today than it was 10 years ago...

  3. Student loans are just another bail out. Worse, it's not being done to help the economy but rather for political purposes. The White House political staff showed their hands in leaked memos when they said that if they state the artificially lowered rates must be continued but demand they be paid for with taxes on the rich they will accomplish several political goals:

    1. They buy votes from the students whom can be motivated to vote if it affects THEIR pocketbook and their parents whom otherwise might not vote.

    2. By insisting it be paid for by increased taxes on the rich (their definition of the rich means sole proprietor small businesses) an issue that they now is sure to cause a squabble with the opposition party they can pitch students and their parents against Obamas opposition. Another phony manufactured conflict like the war on women.

    3. As it is an election year this tactic takes an issue that should be a non issue and makes it seem mandatory when it is not. Students and cosigners signed contracts to repay their loans at a specified rate. The rates were temporarily lowered as part of the stimulus and economic package and are due to revert back to their agreed upon rates. This current action frames the issue as a necessary action and it is not. It is simply another bailout, nothing more.

    The entire issue was a ginned up action to mischaracterize the opposition party and increase votes for the president. He is not doing it because he cares about the students. They are merely more fodder for his class warfare cannon that he sets off daily.

    The biggest shame is that we have so many citizens who are so easily duped and so many that will vote their pocketbooks even if it hurts the country at large and someone else has to pay their fair share. The lenders still get the same rate, the difference is borrowed from China and India like everything else and repaid by the tax payers of all 50 states.

    That students think it's fair or their entitled to have folks in another state where they will never live or work and pay taxes pay back or subsidize their student loans should be shameful to them.

    I already paid for my college by working full time before and during my classes and my wife and I spent 10 years repaying her student loans at full value by working two and three jobs when necessary. Anyone who doesn't see the entitlement society has taken over is either an ostrich or a denier.

    Worse they are selfish and are mortgaging future generations to repay what they are spending.

  4. No matter what "job" you have in life, you want a raise every year. Including everyone that works at a school or college. When you get a raise, the price of things go up. When people at colleges get a raise, the money has to come from someplace. Yes, cost of education has gone up, so has everything else in the world. Are any of the products you bought 20 years ago better today? No, they just cost more as does education.

    We raised six children in this Valley. Told each one we would pay for their education. Three took us up on it and we paid it in full. No student loans at all. We saved all their lives to be able to do that. Yes, those three make much more then our children that did not get higher education. That was THEIR CHOICE. Not ours or anyone else's.

    My personal view is a parents we did what we had to do to save so that the kids had the chance at a better education. Others should do the same. We are not part of the 1%, wife and I do not have college educations. We just worked, never got in over our head and saved for our kids.

    Kids are educated and out of the house now and we have a lot more money for our selfs. Life is good! ;-)

  5. President Obamas failed economic policies have a lot to do with the student loan crisis for sure...

    According to the Center for Labor Market Studies at Northeastern University, about 53.6 percent of men and women under the age of 25 who hold bachelor's degrees were jobless or underemployed last year, the most in at least 11 years. According to the Pew Research Center,

    if we broaden the age group to 18- to 29-year-olds, an estimated 37 percent are unemployed or out of the work force, the highest share in more than three decades.

  6. Cut interest rates in half.

    Make it temporary.

    When interest rates are about to rise, blame the Republicans.

    Not effective, but it sure can hide having no clue and having no policy.

  7. Students have no right to student loans. And many who got the hand outs refuse to pay them back. So let's stop this nonsense. NO more student LOANS. When we pretend to give them a break on interest rates, the rest of our economy must make it up--a lower standard of living for everyone. So many students are unemployed and can't pay back right now. So could they please explain to new students the risks they take when going deeply into debt. Is this any way to "grow up", to walk away from your circumstances? Many who are employed won't pay them back under any circumstances.