Earlier this month, I wrote about the impending interest rate increase for certain student loans. If no action is taken by Congress and the President, rates will double from 3.4 percent to 6.8 percent just two days from now. Unfortunately, all I can report is that the House is still the only body in our nation's capital that has taken action on this issue.
The bill we passed in the House provides a market-based variable interest rate, mirroring what the President proposed in his own budget earlier this year. It sets the rate at the 10-year Treasury rate plus 2.5 percent, while also protecting borrowers by capping the rates at 8.5 percent. In other words, no matter how high interest rates may go, 8.5 percent is the highest students would ever pay. They would also be allowed to refinance if rates dropped.
The differences between the House plan and the President's are small, and there's no reason they cannot be overcome quickly. However, it would appear the President and his allies in the Senate have done the political math and come to the conclusion that it benefits them to let interest rates double and then try to blame it on House Republicans. That is truly a shame, and it is further proof this President remains far more interested in scoring political points for himself and for his party than he is in actually governing.
We need to get this done for students, without politics being a part of the equation. The House passed our bill, and I strongly supported it. Since then, the Senate has done nothing to prevent the rate increase. If they or President Obama truly have problems with our bill, then they should lay their proposals on the table so we all can get to work finding a compromise. Instead, our students now face an uncertain future when it comes to their loans.
This coming week, we will celebrate America's birthday. Less than a month before we declared our independence, future second President John Adams wrote the following in a letter to an acquaintance: "Objects of the most stupendous magnitude, and measure in which the lives and liberties of millions yet unborn are intimately interested, are now before us. We are in the very midst of a revolution the most complete, unexpected and remarkable of any in the history of nations."
Mr. Adams was, of course, entirely correct. The American Revolution changed the course of human history. Never before had a nation been founded on the idea that citizens could and would control their country's destiny. In the 237 years since, America has grown to be the freest, most powerful and wealthiest country in the world. That is no coincidence. It is a direct result of the representative democracy envisioned, and then created, by the brilliant and brave visionaries who risked their lives to create our incredible country.
The promise of America that our Founding Fathers strove for is still alive today. With all the challenges we face, I believe our best and brightest days are ahead of us. Happy Independence Day.
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