US: Threadbare “college affordability” bill passes in the House

Specifically, the legislation would reduce interest rates on need-based federal loans for undergraduate students from 6.8 percent to 3.4 percent over the course of five years. In 2007, the rate would decline to 6.12 percent; to 5.44 percent in 2008; 4.76 percent in 2009; 4.08 percent in 2010; and finally to 3.4 percent in 2011. Approximately 5.5 million federal Stafford subsidized loan borrowers would be affected by the change. Senate hearings on the bill are expected to begin January 25.

The bill’s backers have extolled the rate cut as a significant first step, but in fact the proposal reveals the Democrats’ unwillingness and inability to initiate reforms of any substance. The student loan proposal represents the very least they can do in regard to lessening education costs.

First of all, the rate reduction proposal in its current form is temporary. Once the rate is lowered to 3.4 percent, it will remain in effect for a mere six months before reverting to an unspecified rate. Democrats contend that this was the result of a compromise aimed at holding the cost of the legislation to $6 billion, and that the cut will be made permanent before the rate resets.

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http://wsws.org/articles/2007/jan2007/educ-j26.shtml