Student loans must be predictable

Unfortunately, Congress waits to make decisions until after most students have decided which school they will attend.

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The cost of college, by nearly anybody’s standard is incredibly expensive. It’s like buying a new car, a pretty good one, every year.

And just as many people need loans to buy cars, they have become essential for financing a college education. That explains why, as the federal government reported in April, student loan debt is nearly $1 trillion, twice what it was in 2007. To put that in perspective, auto loan debt is $783 billion while credit card debt is $679 billion.

Since student loans have become so critical to college students and their families, it is ridiculous — as well as unfair — Congress does not establish interest rates for federal loans that students can depend on.

Like everything else Congress does, issues are debated annually and decisions aren’t made until the last possible moment — and sometimes not even then.

Interest rates for subsidized Stafford loans will double, from 3.4 percent to 6.8 percent, on July 1 if Congress doesn’t take action. Most students have decided on a college long before then. Lawmakers on both sides of the political aisle contend they want to avoid the increase, but they do not agree how it should be done.

“The fact that it’s so unpredictable for students and their families ... is pretty senseless,” said Evan Smith, University of Washington student body president. “I fear that this is going to be the new normal in Congress.”

The concern is legitimate. Congress doesn’t seem bothered by the turmoil its eleventh-hour decisions create on many issues, including the impact raising the debt ceiling had on the nation’s credit rating. If senators and representatives were bothered the pattern would not continue.

Beyond the need for interest-rate certainty, non-subsidized federal students loans could — and should — have a lower interest rate given the low interest rates offered on homes, cars and credit cards by for-profit lending companies.

Students need a financial break as well as a little peace of mind.

Whatever the rates, Congress should set them well into the future so students and their families can plan.

Planning lets students and families determine how much they can afford, what kind of a summer job is needed and how much must be borrowed.

Planning works. Congress ought to try it.

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