When it comes to student debt, everyone agrees it’s a problem, but Democratic and Republican lawmakers have differing opinions on how to solve that problem. According to a new analysis by LendEDU, Republican and Democratic congressmen and congresswomen differ dramatically on key college affordability issues.
The analysis found that, of the 6 major college affordability initiatives proposed over recent years, Democratic senators supported 4.07, on average, while Republican senators supported 1.8. Furthermore, Democratic representatives supported 4.77 while Republican representatives only supported 1.71.
Take interest rate legislation for starters. LendEDU found that nearly 100 percent of Democratic senators support lowering interest rates while 88 percent of Republicans favor interest rate reform. One of the biggest factors for student loan debt is the interest rate that borrowers pay over the life of their loans. With the government takeover of student loans in 2009, Congress was left to determine federal student loan interest rates, leading to annual bipartisan political games. The bipartisan gridlock hurt more than it helped student borrowers, so Congress passed a bill in 2013 with bipartisan support to kept rates low. Keeping rates low is a bit of a no-brainer, because it saves money for borrowers, so the lack of a party line is understandable.
Pell Grants have long been a hotbed issue for lawmakers on both sides of the aisles. Only 18 percent of Republicans in the Senate support Pell Grant expansion and continuation compared to around 85 percent of Democrats. Plenty of Republicans view the Pell Grant program as an entitlement which they are staunchly against, but Democrats see it as necessary to help low-income students pursue a college education. Still there are Republicans that agree with the Democrats on Pell Grants, but most would rather cut the budget.
With student loan debt barring graduates from buying a home, getting married, or starting a business, some politicians started pushing federal student loan refinancing. Currently, the interest rates on federal student loans are fixed, but federal refinancing would allow borrowers to change and reduce their current interest rate. An overwhelming majority of Democrats support federal refinancing while most Republicans oppose it.
As for student loan forgiveness, there are many bills and proposals regarding it, but lawmakers can’t seem to agree if it will help struggling borrowers or create another unnecessary cost. Student loan forgiveness legislation received the support of around 37 percent of Democrats and only 6 percent of Republicans in the Senate and 75 percent of Democrats and 8 percent of Republicans in the House of Representatives. Overall, the only substantial support comes from Democrats in the House.
Knowledge is key, especially when making financial decisions. While lawmakers on both sides argue that student loan borrowers need to be more informed, neither Democrats nor Republicans seem completely on board with increasing financial literacy. Just 41 percent of Democratic senators and 30 percent of Republican senators supported legislation. Some politicians, mainly Republicans, think improving financial literacy is the primary solution to the student debt crisis while others think it’s an add on to other solutions including refinancing federally backed loans.
Author: Dave Rathmanner
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