Home > 2014 > Students > Rep. Virginia Foxx: The Student Loan Debt Solution Is All About Jobs

Rep. Virginia Foxx: The Student Loan Debt Solution Is All About Jobs

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Many college graduates are delaying some of life’s most important decisions – including starting a family and buying a home – because they face a pile of debt with no job prospects.  A record number of young adults live with their parents and roughly half of college graduates under the age of 26 rely on mom and dad for financial help.

President Obama wants people to believe that shaving a few dollars off monthly student loan payments will solve the problems plaguing graduates. That’s the essence of a proposal being touted on the campaign trail that would raise taxes and allow some graduates to refinance federal student loans.

Let’s be honest: This scheme is more about helping politicians survive an election than helping graduates survive the Obama economy. Sadly this is not the first time young Americans have been used as pawns in political messaging.

In the summer of 2013, interest rates on most federal student loans were set to double. The president included a long-term, market-based solution in his budget proposal and urged Congress to pass it to prevent an interest rate spike.

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The Republican-led House passed a bill mirroring the president’s request. Yet the Obama administration rejected it and the Senate refused to back it, demanding instead a short-term fix.

Why the flip-flop? According to one press report, Democrats hoped to kick the can down the road to “rally younger voters to the polls” in the 2014 elections.

Fortunately, a long-term solution became law. We averted an interest rate spike and provided students and families more certainty. We did the right thing by taking the threat of an interest rate hike off the table, leading to some politicians’ current search for another election-year gambit to rally voters.

This political gambit fails to address the core of the problem: graduates entering a job market that lacks good-paying jobs. No monthly payment is affordable if you are underemployed or out of work.

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The best way to help young Americans with debt burdens is to get our economy moving again – precisely what House Republicans are trying to do. The House has advanced more than 40 jobs bills, many with bipartisan support, that would open new doors of opportunity for struggling graduates. Yet all of these bills are collecting dust in the Senate. Sen. Harry Reid (D-Nev.) may not agree with every detail of every bill, but that is no excuse for his total inaction.

Recently, Congress did come together to pass a bipartisan fix for our broken workforce development system. We got the job done because the House acted, the Senate came to the table, and the administration got out of the way. Now we have a reformed law that will help put people back to work.

Our nation desperately needs more bipartisan successes like this. Job creation will remain the House’s number one priority until every graduate and struggling worker who needs a job can find one. Meanwhile, we are also taking steps to strengthen higher education for current and future graduates.

If we enact a series of commonsense reforms, the federal government can help more Americans turn the dream of a college degree into reality. For starters, Washington should encourage more innovation, such as competency-based education, so students can earn a degree at a faster pace and lower cost.

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Federal policymakers should empower students and families to make smart decisions by enhancing financial counseling and delivering better information to students looking for the right college or university.

We should improve federal student aid. Many students take out loans when other financial assistance is available. It is time to streamline the confusing maze of aid and grant programs, and make it easier for students and families to apply for help.

Congress should also strengthen the options available for students to repay their loans. The current system encourages students to borrow more than they need and can afford. We should pursue policies that ensure low-income individuals get the help they need, while also protecting taxpayer dollars.

The House has already passed legislation addressing some of these issues, often with overwhelming bipartisan support. These efforts would make a real difference in the lives of students and they deserve consideration in the Senate.

Life after graduation should be filled with hope and excitement. For far too many, it’s become a time of hopelessness and anxiety. Countless college graduates are struggling because of the president’s failed economic and education policies.  Let’s stop treating young adults as political pawns and start working together to ensure they can build the future they deserve.

Read Sen. Elizabeth Warren’s op/ed on the student loan bill hitting the Senate floor this week.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.

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  • KJ

    House Republicans are not interested in helping to create jobs. The Republicans are going to have to admit that trickle down economics doesn’t work. Student debt is high because colleges are underfunded. The cost burden is passed onto students and the government profits from the situation. I would suggest reading Dr Joseph Stiglitzs’ White Paper “Reforming Taxation to Promote Growth and Equity”. One of Dr Stiglitzs’ proposals is to tax all income at the same rate, income and capital gains.

    I would say that if you want to create jobs, stop American corporations from parking trillions in off shore tax havens to avoid taxes and incentivise domestic job creation with tax breaks for creating jobs in America.

  • RF

    High interest rates for loans taken out between 2007 and 2012 are most certainly a HUGE factor affecting graduates’ ability to repay loans – not just broad generalizations about job prospects. I am “delaying some of life’s most important decisions” because I “face a pile of debt” with high interest rates – not because I have “no job prospects.” I had to take out loans to attend graduate school during the 2007-2012 time frame, when rates ranged from 7.5-8+%. I was able to secure a well paying job soon after graduation. However, the fact that my loans are accruing over $14,000 in interest per year means that I cannot put that money towards other important things (saving for a house, retirement, marriage, children, etc.). The proposed refinance bill would help thousands of young adults like myself. You cannot call it a “scheme” that is “more about helping politicians survive an election that helping graduates” when, in reality, it would tremendously help many young graduates and allow them to contribute more to the economy. The ambiguous plan to get the “economy moving again” could eventually help graduates – but the refinance bill would immediately help graduates saddled with high interest rate debt and also help the economy at the same time.

  • jplifer

    Yes, Congresswoman Foxx, let’s be honest. Tell us who you are really trying to protect. It is surely not the U.S. college students trying to get a good education and improving the quality of their lives. No, you remain on the payroll for the for-profit colleges who continue to be one of your largest campaign contributors, including Corinthian Colleges, who is currently under investigation by the State of California.

    The so-called “jobs bills” that you mentioned being passed by the House Republicans are a joke. The list of “jobs bills” reveals that the proposed legislation falls into three categories. The largest category is tax breaks and gifts for the oil, coal, and natural gas industries. The second category is regulatory repeal, which is also another gift for big business. The last category is attacks on Obamacare. Nowhere on the list of jobs bills is there an actual real live jobs bill.

    The list of 40 bills fit the Republican ideology, but history tells us that cutting taxes for the wealthy, giving gifts to special interests, and rolling back regulations are three policy choices that do not create jobs. These proposed jobs bills would not put more people back to work. The House Republican definition of a jobs bill is different from what most people think of as job creation.

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