How To Build a Tuition Trap

by Debra Saunders | April 26, 2012 12:01 am

This week, President Barack Obama has been warning students that without his intervention, interest rates for a federal student loan program will double to 6.8 percent July 1.

In the process, he’s been misquoting a Republican congresswoman. On Tuesday, he told students at the University of North Carolina at Chapel Hill that she has “very little tolerance for people who (say) they graduate with debt, because there’s no reason for that.”

And: “She said students who rack up student loan debt are just sitting on their butts, having opportunity ‘dumped in your lap.'”

The audience booed.

The congresswoman in question is Rep. Virginia Foxx, R-N.C., a grandmother first elected to the House in 2004, when she was 61. The chairwoman of the House Subcommittee on Higher Education and Workforce Training and a former president of a community college, she is proud that she worked her way through college without borrowing a dime. It took her seven years. And here is what Foxx actually said on G. Gordon Liddy’s talk show earlier this month:

“I have very little tolerance for people who tell me that they graduate with $200,000 of debt — or even $80,000 of debt — because there’s no reason for that. We live in an opportunity society, and people are forgetting that. I remind folks all the time that the Declaration of Independence says ‘Life, Liberty, and the Pursuit: of Happiness.’ You don’t sit on your butt and have it dumped in your lap.”

In other words, Foxx didn’t say there was no reason for the average student loan burden of $25,000; she was saying that borrowing is a choice and that young people shouldn’t take out huge student loans that they cannot repay.

I should think the president agrees, as his administration is working on a “Know Before You Owe” program to educate teens and parents about student loan debt.

The president told students that Congress lowered Stafford loan interest rates with the support of 77 House Republicans. (Politico has reported that then-Sen. Obama missed two votes on the 2007 College Cost Reduction and Access Act, which he now wants to extend, and he was not a co-sponsor.)

This year, Republicans balked at the $6 billion price tag. Democratic and GOP leaders now are haggling over how to pay for the subsidy — with tax increases or spending cuts.

On Monday, presumptive Republican presidential nominee Mitt Romney plunked himself in the easy middle on this issue. He supported extending the 3.4 percent rate while exhorting Washington not to fund the subsidy with tax increases.

Passage appears inevitable. Interest rates are low, and college tuition has skyrocketed in recent decades; with Washington spending $3.8 trillion this year, who wants to lose votes over a (comparatively) lousy $6 billion?

Neal McCluskey of the libertarian-leaning Cato Institute sees a missed opportunity for the GOP to make the case to voters that easy loans entice students to take out bigger loans. “They’re not making colleges more affordable,” said McCluskey, “because colleges are happy to raise their prices to take that money.”

There’s a rift in America between voters who believe that Washington aid has driven up tuition and Americans who believe that high tuition demands more aid from Washington. It’s a tuition trap that keeps luring more Americans because the middle way is to do both.

Email Debra J. Saunders at dsaunders@sfchronicle.com.

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