May 31, 2013 by David K. Sutton
Student Loan Interest Rates: Show Some Personal Responsibility, Unless You Are A Bank
Three weeks ago Massachusetts Senator Elizabeth Warren introduced a bill that would give students the same interest rate on their loans that banks get from the Federal Reserve.
The Raw Story — “Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about .75 percent,” Warren said. “But this summer a student who is trying to get a loan to go to college will pay almost 7 percent. In other words, the federal government is going to charge students interest rates that are nine times higher than the rates for the biggest banks–the same banks that destroyed millions of jobs and nearly broke this economy. That isn’t right.”
On July 1, Federal Stafford subsidized loan rates for incoming students will double to 6.8 percent.
Today Indiana Representative Luke Messer (R) suggested higher interest rates for students equates to “personal responsibility.”
The Raw Story — Rep. Luke Messer (R-IN) told MSNBC’s Luke Russet that young people should support the Republicans’ plan to tie student loan interest rates to market rates because “I think personal responsibility is pretty cool.”
“When it looks like the Republicans are on the side of letting rates go up to 8.5 percent and the president wants to keep them lower in 3 to 4 [percent] range, that is problematic for you guys, is it not?” Russert asked.
“Republicans have to do a better job of explaining how our ideas apply to young people. Sometimes it sounds like he is selling ice cream and we’re selling spinach. I think personal responsibility is pretty cool,” Messer replied. “There is nothing out of date about freedom, and we have the policies that get this budget back in line, stop the explosive growth of spending. Spending that will be paid for by this generation. We’ve got to do a better job of explaining that.”
Apparently “personal responsibility” only applies when you have no money and are therefore powerless. If you have enough wealth and power, personal responsibility takes a backseat to consolidating even more wealth and power. I fail to understand the point Messer was trying to make. What does personal responsibility have to do with student loan interest rates? It would be one thing if Obama or Warren were proposing some kind of student loan amnesty, but they simply want to make college just a tiny bit more affordable for students. When interest rates for banks and even for mortgages are at historic lows, how can someone go on TV and tell students to show some “personal responsibility” and pay a higher interest rate?
And don’t get me started on his “explosive growth of spending” comment. This is yet another example where facts play no role Republican narrative construction. The narrative is that Obama went on a spending spree, and no amount of proof to the contrary will deter Republicans from their chosen talking points.