Missouri's Republican Senate candidates were asked at a debate whether they wanted to see federal student loan interest rates double from 3.4 percent to 6.8 percent, and Rep. Todd Akin apparently decided he sure doesn't need the votes of young people:
Akin said the government should be out of the student loan market altogether. "America has got the equivalent of the stage three cancer of socialism because the federal government is tampering in all kinds of stuff it has no business tampering in," he said.The federal government "has no business tampering in" giving loans to citizens so that they may obtain an education, gain knowledge and improve their economic productivity. That's socialism. One of the funny things here is that we're talking about something that's profitable for the federal government; the question is the profit margin:
Roosevelt Institute fellow Mike Konzcal has noted that the government borrows at a far lower rate than [3.4 percent], which raises the question of why it is not investing more robustly in young people.There's the dread cancer of socialism for you. The federal government is collecting interest that private lenders could otherwise be vacuuming up.
Konczal pointed out that the government makes a profit somewhere around 13 percent for each dollar of loans, and because the loans are not dischargeable in bankruptcy and Social Security payments can even be garnished to make them up, default may even be more profitable for lenders than borrowers making payments on time.
High student loan interest rates are basically a tax Republicans want to levy on people who can't afford to pay for college out of pocket—not rich people, in other words. Some Republicans are fine with that tax being paid to the government; others, like Todd Akin, would prefer to privatize it. Either way, given high tuition rates even at public colleges and Republican resistance to regulating the for-profit college industry, it's a tax many people will be paying for the rest of their lives.