Wednesday, April 25, 2012

Education: Low Interest Student Loans – A Very Small Step

Mitt Romney apparently agrees with President Obama on extending the 3.4% interest rate on student loans, which puts both of them at odds with Republicans in Congress. Of course, we will have to wait and see if Mr. Romney shows any real leadership in helping the President overcome the opposition in Congress from his own party. I would humbly submit that this is only a very small step in restoring the recent damage to our education system. Our chart shows the decline in real government spending using data from this source (see Table 3.15.6. Real Government Consumption Expenditures and Gross Investment by Function). Phil Oliff and Michael Leachman documented how state and local government support of elementary and high school education has been declining since the recession. Diane Epstein discussed what the Ryan budget would mean to education spending a month ago. Pell Grants, which already have seen declining values relative to college costs, are slated to be drastically reduced. Head Start funding will also be reduced. Of course, most of what public commitment to education comes from state and local governments, but the Federal government can reverse these recent cuts with a greater commitment to Federal revenue sharing. And the bonus would be that we might avoid doing further damage to the economic recovery ala austerity. In other words – if Mr. Romney wants to really lead, then he will insist that we reject this Ryan budget.

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