A young man, who did not want to be identified, wears a sticker showing his college debt during an Occupy Wall Street rally against the high cost of college tuitions April 25, 2012 in New York. Scores of students and former students gathered to complain about the high cost of tuitions and college loans. April 25th marked the day when US student debt reached USD 1 trillion. AFP PHOTO / DON EMMERTDON EMMERT/AFP/GettyImages R:\Merlin\Getty_Photos\510505937.jpg
Updated: May 30, 2012 8:13AM
It’s bad for students when their college loans become a political football in a game between Republicans and Democrats.
It’s also bad for the rest of us. The days when America can import all the skilled workers it wants are ending, and the next generation of Americans needs a superb education to compete with the world in the new knowledge economy.
Current American workers need retraining and additional skills, as well, and a reasonable access to higher education is the path up the mountain of social mobility for lower- and middle-class Americans.
And fighting over college loans won’t get us there.
Both Republicans and Democrats say they hope to prevent interest on students loans from doubling to 6.8 percent on July 1. But the two parties can’t agree on how to make that happen.
On Friday, U.S. House Republicans passed a bill that would prevent the interest from doubling, but they would do it by slashing funds for a prevention and public health fund that is part of the new health-care reform law.
House Democrats also would keep the interest rate from doubling but pay for it by cutting subsidies to oil and gas companies. Senate Democrats want to go after a tax shelter that some corporation owners use to avoid payroll taxes on large parts of their incomes.
We think, on balance, the Democrats have the better of the argument, but we suspect there’s a third alternative acceptable to both sides, so long as negotiations are conducted in good faith.
Underlying this debate is a huge problem: The cost of higher education, of which student loans are a big part, threatens to put college out of reach for many Americans.
From the vantage point of students and their families, the burden of tuition and student loans already is enormous. Student debt has soared to the point that it could drag down the economy significantly. By some estimates, it tops $1 trillion.
If costs keep going up, people are going to drop out of the higher education picture altogether, which means America’s work force will have fewer of the highly trained workers it needs. Shortages already are cropping up.
“There are now 6 million vacant jobs [in the United States], and we don’t have the talent to fill them,” said Edward E. Gordon, author of Winning the Global Talent Showdown and seven other books about jobs and work-force skills.
Other countries, particularly China and India, are pursuing the same highly educated workers that America needs, Gordon said.
American’s future prosperity will rely on talent educated here.
Neither the Republicans nor the Democrats say they want to double student loan interest. So they should stop doubling down on their competing strategies.
Fix this, and move on.