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Quick fix not enough for student loans

BY DI EDITORIAL BOARD | JULY 16, 2012 6:30 AM

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Those of us in college must believe that an education really is the way to a brighter future. If that was not the case, we students may all feel very silly for paying $8,057 (in-state) or $26,279 (out-of-state) in tuition and fees each year to attend this fine university, especially when 72 percent of us do it on borrowed dollars, according to the Princeton Review.

Keeping student-loan rates low on subsidized Stafford Loans is of great importance, but the recently passed legislation, HR 4348, only offers a short-term solution. The legislation, passed by Congress, allocated $100 billion for infrastructure initiatives and kept subsidized Stafford Loan rates at 3.4 percent interest — only until next year.

This one-year, lower-rate extension is unsustainable, and quick fixes, unlike education, are not the way to a brighter future. Rather, U.S. leaders need to seriously focus on lowering the federal deficit in their long-term plan — a move that would ultimately benefit students.

According to the Pomerantz Career Center Report for Spring 2011, 81 percent of the students graduating from University of Iowa Tippie College of Business were employed within six months of graduation, and 61 percent of graduates from the UI College of Liberal Arts and Sciences found employment in six months as well.

Obviously, a college degree does not necessarily guarantee a job.

With a little ingenuity, Congress recycled the year-old plans using such key phrases as "United States Code is amended by … striking '2011' … and inserting '2012.' "

Thus, Americans have another quick but unreliable fix. Now, some estimated 3 million construction workers can plan on having a job for another year, and students can continue to pay 3.4 percent interest, according to the bill, but then, we'll have to do it all again.

But Americans don't want to try again next year. Students want affordable and reliable access to education, and they want to get jobs.

Many Americans want more access to jobs, because right now, the unemployment rate is 8.2 percent, and the labor force only comprises 63.8 percent of working-age Americans, according to Bureau of Labor Statistics.

Seventy-four senators and 373 representatives voted for the bill, responding to students and construction workers, but they were unable to come to a long-term agreement regarding the budget and the deficit.

Americans must refuse to be pacified. Obviously, education and infrastructure are priorities that serve a valuable function in society, but they need long-term budgets so that cities and municipalities can plan and build for the future. Because this bill only offers a temporary fix — and at costly one at that — it must be coupled with a long-term jobs plan to be successful. The simplest plan would include cutting the deficit.

Balancing the budget would ensure that those to whom the government owes money are paid and strengthens the economy so that the private sector may grow and employ more people.

In the short-run, cutting the deficit means cutting government spending, which probably means cutting some public-sector jobs. It may even mean that senators and representatives see decreases in their own wages, as the mayor of Scranton, Pa., has done.

As reported by the Boston Herald, Scranton Mayor Chris Doherty cut the wages of nearly 400 municipal employees, including firefighters, police officers, and even his own wages, to the federal minimum wage because, as Doherty said, "the money just isn't there."

Right now, federal money just isn't there, either. The federal budget is so far from balanced that even if all Americans paid 100 percent of their incomes to the federal government, we would still come up short from paying off all of the federal debt.

The federal deficit is larger than the entire U.S. GDP, according to the Bureau of Economic Analysis. That means that there is no short-term plan, and a balanced budget is not in the near future, but the House of Representatives must write a budget that puts us in that direction rather than offering solutions that are important, but unsustainable at present.

Until Congress can find more bipartisan compromises, expect to see more Band-Aids that will ultimately exacerbate the growing suture that is the federal debt.

The short-term is not the solution; It's time to focus on sustainability. Election year or not, Republican or Democrat, America is still a country, and Americans of all ages need some confidence in a brighter future.


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