GJP UMich 7 Week
Politics - Student Loan Interest
Rates
1NC
Congress will reach a deal on student loan rates – Obama is pushing
Davis 7/18
Susan, ‘Senate vote likely next week on student loan deal’,
http://www.usatoday.com/story/news/politics/2013/07/18/senate-reaches-student-loan-deal/2550777/
WASHINGTON -- Senate Majority Leader Harry Reid said the Senate will vote no later than next week on
a
bipartisan compromise to change the student loan program to tie it the financial market and
retroactively fix loan rates that doubled this month.¶ "The legislation as
presented to me isn't everything I want, but it's the work of a number of Democratic and
Republican senators working long, long hours," said Reid, D-Nev.¶ The deal was announced late Wednesday,
and although it has lukewarm support among liberal Democrats, it is likely to
pass Congress and be signed by President Obama because, without action, students will face
higher interest rates on loans this school year.¶ A senior House GOP aide said House leaders were
checking with rank-and-file members Thursday to make sure the bill has
support in the House, but that it was likely to pass because it is similar to House-passed
legislation. A vote in the House is also likely next week, the aide said. The aide was not authorized to speak publicly
because a final decision on the bill has not been made.¶ House Speaker John Boehner, R-Ohio, was
optimistic. "It follows the structure of the House bill, so market-based reform, market-based rates, similar what the
president called for and what the House has already passed," he said.¶ On July 1, rates doubled from 3.4% to 6.8% because
Congress could not reach an accord on how to address the loan rates. The House approved a Republican bill in June to tie
loan rates to the financial markets, and a similar proposal gained steam among Senate Republicans and a handful of
Senate Democrats.¶ Obama endorsed the principle in his budget, which added momentum to the
proposal. Liberal Democrats were wary of the proposal because they say it could allow rates to rise higher than the current
6.8% rate set by Congress, and reasoned that doing nothing was better than creating a new process that could allow for
higher interest rates and tie student loans to potentially volatile changes in the financial markets.
[Insert Link]
[Insert Impact]
Econ Impact
Failure to reach a deal causes economic decline
Forbes 13 [“Backlash: Student Loan Burden Prevents Borrowers From Buying Homes, Cars,” Forbes,
http://www.forbes.com/sites/halahtouryalai/2013/06/26/backlash-student-loans-keep-borrowers-from-buying-homescars/]//MY
You didn’t have to own a home to feel the effects of the housing crash. The student loan
problem could have similar ripple effects . Student loan debt has topped $1 trillion as two-thirds of
students graduate with debt. There are nearly 37 million student loan borrowers in the United States currently repaying a
student loan, according to the Fed. It’s not just the young 20-something crowd that’s burdened with the debt. Over 60% of
that the $1 trillion is held by those over 30-years-old, 15% is held by those over 50. “This issue is really starting to affect
the economy. Borrowers can’t purchase a home because they can’t make the down payment,
for example,” says Anne Johnson, Director of Campus Progress. Others
are making their career decisions
based on their debt obligations. For instance, borrowers with loads of debt are not entering
jobs in the public sector due to high loan payments. Student loan experts hosted a call on
Tuesday to discuss the growing problem of student debt and the implications on the
economy. The most pressing issue right now is an incredible rise in the interest rate
on so-called Stafford loans. Such loans are subsidized by the government but rates are
set to double from their current 3.4% to 6.8% by the end of the week if Congress fails to act. ProgessNow
says more than 7 million college students and families who rely on these loans and would
be hit with $1,000 hike in college costs if rates double. Senator Tom Harkin, an Iowa Democrat, said on
Monday it’s unlikely much will be done to prevent the hike before July 1. The potential hike in Stafford loan rates is “one
small battle in the overall war” in the student loan space, according to Robert Applebaum, cofounder of
StudentDebtCrisis.org. There are three types of student loan debt: federally backed debt which amounts to $850 billion,
private loans provided by companies like Sallie Mae which accounts for $150 billion to $200 billion, and other debt in the
from of credit card, home equity loans or second mortgages. Research from ProgressNow found that the average time it
takes to pay off student debt is twenty years. Students with bachelors degrees can expect to repay their loans in 19.7 years
with an average monthly payment of $499, and those with graduate degrees 23 years with an average monthly payment of
$653. The bigger picture is that theses borrowers are delaying major life decisions like buying a
home or car as a result of their student loans. And while much has already been said
about the difficulty of getting student loans forgiven in bankruptcy there are also
limitations on refinancing student debt. Johnson says refinancing Stafford loans at a rate of
5% would save borrowers $14 billion in interest payments annually. The rate of home
ownership is 36% less among those currently repaying student debt. In every household income
category, individuals who have already paid off a student loan were more likely to purchase
a new vehicle (as opposed to purchasing a used vehicle) during the last ten years. There’s over $6 billion
lost annually in new car purchasing power that’s directly tied to student loan debt, says
ProgressNow’s Scott Ross. The debt is such a burden to some that about one third of
milliennials say they regret going to college. “We have to ask: ‘What are we losing as these generations are
borrowers is paying off student loans rather than living the American Dream?” Ross says.
Economic decline risks multiple global nuclear wars
O’Hanlon 12
Kenneth G. Lieberthal, Director of the John L. Thornton China Center and Senior Fellow in Foreign Policy and Global
Economy and Development at the Brookings Institution, former Professor at the University of Michigan [“The Real
National Security Threat: America's Debt,” Los Angeles Times, July 10th,
http://www.brookings.edu/research/opinions/2012/07/10-economy-foreign-policy-lieberthal-ohanlon]
Alas, globalization and automation trends of the last generation have increasingly called the American dream into
question for the working classes. Another decade of underinvestment in what is required to remedy this situation will
make an isolationist or populist president far more likely because much of the country will question whether an
internationalist role makes sense for America — especially if it costs us well over half a trillion dollars in defense spending
annually yet seems correlated with more job losses. Lastly, American economic weakness
undercuts U.S. leadership abroad. Other countries sense our weakness and
wonder about our purported decline. If this perception becomes more widespread, and the case that
we are in decline becomes more persuasive, countries will begin to take actions that reflect
their skepticism about America's future. Allies and friendswill doubt our
commitment and may pursue nuclear weapons for their own security, for
example; adversaries will sense opportunity and be less restrained in throwing
around their weight in their own neighborhoods. The crucial Persian Gulf
and Western Pacific regions will likely become less stable. Major war will
become more likely. When running for president last time, Obama eloquently articulated big foreign policy
visions: healing America's breach with the Muslim world, controlling global climate change, dramatically curbing global
poverty through development aid, moving toward a world free of nuclear weapons. These were, and remain, worthy if
elusive goals. However, for Obama or his successor, there is now amuch more urgent
big-picture issue: restoring U.S. economic strength. Nothing else is really
possible if that fundamental prerequisite to effective foreign policy is not
reestablished.
STEM Impact
Failure to lower rates deters students from entering STEM fields
McElwee 13 – (Sean, “Tackling Student Loans Must Be Congress’ First Priority”, PolicyMic, 7/16,
http://www.policymic.com/articles/54923/tackling-student-loans-must-be-congress-first-priority)//mm
Congress must lower student loan rates to reinvigorate the economy, invest in America’s
future, and foster the American dream. For many students, like my brother about to head to UConn, the
interest rates on student loans will determine how long he remains under the burden of debt. For other students, it
may decide whether college or graduate school is even a viable option.¶ Broader access to
college, which is made possible by low interest rates, is an investment in the future.
Recently, the U.S. has begun to graduate fewer students, meaning that in 2018, according to a 2010 report from
Georgetown University, the U.S. will be 3 million college graduates short of labor market
demands. At the very time when the U.S. needs more graduates, our politicians are making it harder for
Americans to get degrees and thereby compete on the international labor market.¶ The
high cost of college shuts many poor and middle class students out of college. A study by
Martha Bailey and Susan M. Dynarski found that the college entry gap between wealthy students and poor students
had grown from 39 percentage points to 51 between 1979 and 1997, and that gap held even among students
with the same cognitive ability. The result is staggering. A recent Century Foundation study found that “one is
25 times as likely to run into a rich student as a poor student at the nation’s top 146 colleges.”¶ Of course, some college
students won’t be affected. Wealthy students rely on parental connections to gain admission to elite universities, gain
internship experience, and then graduate to a starting job with health care benefits, likely debt-free. For some lucky
graduates, like Liz Cheney, daddy makes a new job at the State Department tailor-made for her.¶ Sadly, most of us don’t
have these opportunities and struggle with an uninviting job market, even with a college degree. But, we still have to begin
paying off our debts shortly after graduating. In Britain, where my girlfriend lives, students don’t begin paying off their
loans until they find stable employment, and the cost is in proportion to their earnings. In Denmark, education is
considered a right by the people and an investment by the government, and is therefore free. Some students are even
offered a stipend by the government to defray costs. In America, the university is considered a
commodity, one that can easily purchased by the wealthy, but not the poor.¶ Middle-class and
working class students lucky enough to attend college must often work one or two side jobs,
interfering with studies. Is it any wonder that fewer and fewer students invest time in
studying or pursue degrees in science and engineering that require intense amounts
of work and concentration? Plato noted that students cannot study while exhausted, and yet this is what we
demand.¶ Is it then any wonder that the American dream is dying? Economists like Miles Corak have discovered that
upward mobility is now lower in America than a host of other European countries, among them, Denmark, Sweden,
Canada, France, Germany, Norway, and Finland. Is it, as George Carlin claimed, “called the American dream because you
have to be asleep to believe it?Ӧ Lowering student loans below the rate paid by the big banks who destroyed the economy
and the lives of millions Americans would be a good first step. But at all levels our education system is slanted towards
reducing upward mobility. For my brother, for my friends who can’t pay for college, Congress needs to think big.
Maybe Congress should consider expanding the Pell Grant program which has failed to keep up with the rising cost of
college. Maybe Congress could consider zero-interest loans. It would be a start.¶ Remember that the biggest boom in
American innovation came after WWII, when millions of veterans attended college under the GI bill. Remember that the
American dream, as enshrined by James Truslow Adams, was a place where, “each man and each woman shall be able to
attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of
the fortuitous circumstances of birth or position.” This may well be the most short-sighted, ineffective and contemptible
Congress in the past 50 years, but can they truly be foolish enough to gamble with the future of
America’s children? If they do, we may find ourselves asking us what makes America so great.
That destroys our aerospace competitiveness
Albaugh 11 F
Fellow of the American Institute of Aeronautics and Astronautics and member of the International Academy of
Astronautics (4/27/2011 , Jim Albaugh, “Keeping America’s Lead in Aerospace”, Speech to the 10th Annual Aviation
Summit US Chamber of Commerce, http://www.aia-aerospace.org/newsroom/speeches_testimony/)
A final issue influencing the future of aerospace today is our demographics. About half
of
Boeing’s engineers will be able to retire by 2015. The same is true for all the aerospace
companies. We simply are not producing enough engineers in this country, with the right
skill sets, to meet this demand. It’s contributing to what I call the “intellectual
disarmament” of our country. Along with reduced R&D spending, I believe this puts us at risk. If we
continue along this path: America will lose its lead in aerospace . We also risk
breaking a long-standing continuum of capability in our industry. Our economy will lose
an important engine of growth, and our country will be more vulnerable and less secure.
Companies like Boeing will survive, but it may be outside the U.S. We will go to where the engineers and
capabilities are.
Aerospace leadership checks the rise of hostile global rivals
Snead 07 - Aerospace engineer and consultant focusing on Near-future space infrastructure development (Mike,
“How America Can and Why America Must Now Become a True Spacefaring Nation,” Spacefaring America Blog, 6/3,
http://spacefaringamerica.net/2007/06/03/6--why-the-next-president-should-start-america-on-the-path-to-becominga-true-spacefaring-nation.aspx)
Great power status is achieved through competition between nations. This competition is often based on advancing
science and technology and applying these advancements to enabling new operational capabilities. A great power that
succeeds in this competition adds to its power while a great power that does not compete or does so ineffectively or by
choice, becomes comparatively less powerful. Eventually, it loses the great power status and then must align itself with
another great power for protection. As the pace of science and technology advancement has
increased, so has the potential for the pace of change of great power status. While the U.S.
"invented" powered flight in 1903, a decade later leadership in this area had shifted to Europe. Within a little more than a
decade after the Wright Brothers' first flights, the great powers of Europe were introducing aeronautics into major land
warfare through the creation of air forces. When the U.S. entered the war in 1917, it was forced to rely on French-built
aircraft. Twenty years later, as the European great powers were on the verge of beginning another major European war,
the U.S. found itself in a similar situation where its choice to diminish national investment in aeronautics during the
1920's and 1930's—you may recall that this was the era of General Billy Mitchell and his famous efforts to promote
military air power—placed U.S. air forces at a significant disadvantage compared to those of Germany and Japan. This was
crucial because military air power was quickly emerging as the "game changer" for conventional warfare. Land and sea
forces increasingly needed capable air forces to survive and generally needed air superiority to prevail. With the great
power advantages of becoming spacefaring expected to be comparable to those derived
from becoming air-faring in the 1920's and 1930's, a delay by the U.S. in enhancing its
great power strengths through expanded national space power may result in a
reoccurrence of the rapid emergence of new or the rapid growth of current great powers
to the point that they are capable of effectively challenging the U.S. Many great powers—
China, India, and Russia—are already speaking of plans for developing spacefaring
capabilities. Yet, today, the U.S. retains a commanding aerospace technological lead over these nations. A strong
effort by the U.S. to become a true spacefaring nation, starting in 2009 with the new presidential administration, may
yield a generation or longer lead in space, not just through prudent increases in military strength but also through the
other areas of great power competition discussed above. This is an advantage that the next presidential administration
should exercise.
Uniqueness
Will Pass
Will pass – Boehner signaling Senate deal can pass House
Berman 7/18
Russel, Boehner signals House can agree to Senate student loan deal, http://thehill.com/blogs/on-the-money/1007other/312021-boehner-signals-house-can-agree-to-senate-student-loan-deal
Speaker John Boehner (R-Ohio) on Thursday spoke positively about a Senate deal on
student loans that he said is similar to Republican legislation the House passed
last month.¶ “I haven’t seen the details of it, but clearly, it follows the structure of the House bill,” Boehner said at a
Capitol press conference. “It’s a market-based reform with market-based rates, similar to what the president called for and
what the House has already passed. So when we see the details, I’m hopeful that we’ll be able to put
this issue behind us.Ӧ The compromise hammered out in the Senate would
allow the rates on student loans to move up and down with the market but
give students the ability to lock in the rates when they take out the loans — an
aspect not included in the House or White House plan.¶ Another new feature to the
Senate deal would be a cap on how high student loan rates can rise, a key
piece in winning over Democrats wary of allowing borrowing rates for
students to move up and down with the rest of the economy. The Senate compromise
came about after Democrats failed in their efforts to simply freeze the lower borrowing rates for another year.
Will pass – Obama pushing, Reid and Boehner optimistic
Gibson & Everett 7/18
Ginger & Burgess, Senate loan deal could move quickly, http://www.politico.com/story/2013/07/student-loan-rate-deal94423.html
A compromise to roll back the recent doubling of student loan rates could
move swiftly through Congress, keeping students from having to pay a higher rate at the start of the
school year.¶ Senate Majority Leader Harry Reid said Thursday morning that it was possible the Senate could pass the new
bill as soon as Thursday before senators headed home for the weekend after voting on nominees to head the Labor
Department and Environmental Protection Agency.¶ “There’s been wonderful bipartisan
discussions. The legislation presented to me isn’t everything I want, but it’s a work Democratic and Republican
senators working long, long hours,” Reid said, noting a lengthy meeting with a bipartisan
negotiating group at the White House on Tuesday with the president. “We need to make
sure that legislation gets done before we leave here.Ӧ House Speaker John Boehner also expressed
optimism that the Senate deal will get a vote in the House.¶ “I haven’t seen the details of
it, but clearly it follows the structure of the House bill,” Boehner told reporters on Thursday. “It’s a market
based reform, a market-based rates, similar to what the president called for
and the House already passed. So when we see the details, I’m hopeful that
we’ll be able to put this issue behind us.”¶ The bill would tie student loan rates to 10-year Treasury
notes, which would result in rates of less than 4 percent for new loans made this year for undergraduate students. It also
caps rates at 8.25 percent for undergrads, 9.5 percent for graduate students and 10.5 percent for loans to parents, a key
victory for Democrats looking to limit students’ costs as interest rates rise in future years.¶ A key difference between the
House version and President Barack Obama’s proposal — the Senate deal keeps interest rates the
same for the life of the loan. Republicans had proposed having the rates
reset every year, a provision that Obama and the Democrats deemed unacceptable.¶ On July 1, rates were
allowed to double from 3.4 percent to 6.8 percent after weeks of negotiations failed to produce a compromise.
Will pass - bipartisan deal reached by Senate negotiators
Everett & Raju 7/17
Burgess & Manu, Deal reached on student loans, http://www.politico.com/story/2013/07/student-loan-rates-senatedeal-94337.html
Senators have reached a deal on student loans, Senate sources said Wednesday night.¶ Key
bipartisan Senate negotiators met in Majority Whip Dick Durbin’s Office
late Wednesday and emerged confident that they could finally put the vexing
issue behind them.¶ “It would save students in 11 million families billions of dollars,” said Lamar Alexander (RTenn.). “We’d like to be able to do this together and we hope that we can come to a decision right away because families
need to make their plans.Ӧ Alexander,
the top Republican on education issues, said
their proposal would apply retroactively to students who have already drawn federal loans at
higher rates which went into effect on July 1.¶ A Senate aide familiar with the talks said the bill could go on
the floor as soon as tomorrow. Leadership aides said that’s implausible but
not impossible. Otherwise the bill would get a floor vote early next week.¶
The House has passed a different loans bill and would need to take up what
the Senate passes in order for the bill to become law.¶ The new Senate proposal would peg
rates on new loans to 10-year Treasury notes plus 2.05 percent for undergraduates with a cap of 8.25 percent. Graduates
would pay the 10-year Treasury rate plus 3.6 percent with a cap of 9.5 percent and 4.6 percent for PLUS loans with a cap
of 10.5 percent.
Will pass – bipartisan bill has been drafted
Macri 7/18
Giuseppe, Senate ready to vote on student loan compromise, http://dailycaller.com/2013/07/18/senate-ready-to-voteon-student-loan-compromise/
WASHINGTON — The Senate is poised to vote on a bipartisan student loan bill
after lawmakers reached a compromise to lower interest rates from their
automatic hike on July ¶ The weeks-long negotiations made headway late
Wednesday after Republicans and Democrats met with President Obama on a
bipartisan proposal drafted by West Virginia Democrat Joe Manchin, Maine
independent Angus King, Tennessee Republican Lamar Alexander, North Carolina
Republican Richard Burr and Oklahoma Republican Tom Coburn.¶ The senators’ bill
would tie student loan interest rates to market rates — a Republican
proposal that originated with the president and passed in the House — with
the addition of rate caps on subsidized, unsubsidized and consolidated loans
—- the Democratic addition.
Will pass – compromise in the works
Condon 7/18
Stephanie, For now, Congress may finally settle student loan issue, http://www.cbsnews.com/8301-250_16257594443/for-now-congress-may-finally-settle-student-loan-issue/
Democratic and Republican members of the Senate announced Thursday that they
have reached a compromise on lowering -- at least for now -- interest rates on federal
student loans.¶ The compromise plan resembles the legislation already
passed in the Republican-led House, tying interest rates to the market.¶ "The legislation as has been presented to me isn't everything I
want, but it's a work of a number of Democratic and Republican senators working long, long hours," Senate Majority Leader Harry Reid, D-Nev., said on the Senate floor Thursday. He noted that
the
senators who negotiated the deal met with President Obama two nights ago for about 90
minutes.¶ "We have to get this done as soon as possible," Reid said, noting that students will soon be returning to school.¶ Earlier this month, the student loan rate doubled from 3.4 percent to 6.8
Both Democrats and Republicans say they are in favor
of lower rates, but up to this point, they have disagreed on whether or not to
tie the interest rates to the market. The Senate earlier this month rejected a measure that would have restored the 3.4 percent rate
percent after Congress failed to extend the lower rate.
for another year, giving lawmakers more time to find a longterm solution.¶ Undergraduates would borrow at 3.85 percent interest rate with a cap of 8.25 percent. Graduate students would borrow
at 5.4 percent rate with a cap of 9.5 percent. Parents would borrow at 6.4 percent with a cap of 10.5 percent. ¶ The lower rates would last through the 2015 academic year and would be retroactive.¶
A bipartisan group led by Sen. Dick Durbin, D-Ill., formally announced the deal Thursday, saying they hope to pass the legislation before leaving for their August recess. Along with Durbin, the
group included Sens. Tom Harkin, D-Iowa, Lamar Alexander, R-Tenn., Tom Carper, D-Del., Joe Manchin, D-WVa., Angus King, I-Maine and Richard Burr, R-N.C.
Senate leaders and Boehner say it student loan deal will pass
Washington Post 7/17
Senate reaches deal to restore lower college loan rates for most students in coming year,
http://www.washingtonpost.com/politics/congress/ap-sources-senators-reach-deal-to-lower-student-loan-rates-linkthem-to-financial-markets/2013/07/17/38aa840c-ef40-11e2-bb32-725c8351a69e_story.html
We have gone through weeks of negotiations and we have an agreement,” said Sen. Dick
Durbin, D-Ill.¶ Sen. John Hoeven, R-N.D., who was part of the negotiations, said he thinks there’s a good
chance the Senate will agree to the compromise next week. That’s important, he said, because
Republican House Speaker John Boehner indicates the House will take it up soon after
and will likely reach agreement as well.¶ “It’ll be bipartisan,” Hoeven said. “I think
you’ll see a lot of bipartisanship on this bill. that’s the way it should be.”¶ Sen. Heidi Heitkamp, D-N.D., said she, too,
supports the bill. “My top priority throughout these negotiations was to find a long-term solution that would keep student
loans affordable for North Dakota students. This plan will do that,” she said in a statement. “It will give students certainty
and allow them to take advantage of historically low interest rates.Ӧ At the White House, spokesman Jay Carney said
President Barack Obama was “glad to see that a compromise seems to be coming
together.”¶ And Sen. Lamar Alexander, R-Tenn., said students benefited: “For every one of them, the interest rates
on their loans will be lower.”
Will pass – bipartisan negotiations in Senate
Johnson 7/11
Jenna, Washington Post, Student loan deal gets hung up on cost, http://www.washingtonpost.com/politics/student-loandeal-gets-hung-up-on-cost/2013/07/11/d4cdad72-ea6e-11e2-aa9f-c03a72e2d342_story.html, MJ
A bipartisan group of senators was close to reaching an agreement Thursday on
how to set federal student
loan interest rates, but then they learned that their plan
could cost the government $22 billion over the next decade. That restarted
negotiations yet again.¶ Senate Democrats have pushed for interest rates that benefit students over the long term,
especially as market rates soar, without profiting the government. Republicans have sought rates that move with the
market and don’t cost the government.¶ That plan would have tied interest rates to the market. It also would have capped
rates at 8.25 percent for undergraduates and 9.25 percent for all other loans, according to two aides with knowledge of the
negotiations.¶ For the coming school year, that would have meant undergraduates who take out new federal loans would
see interest rates of about 3.6 percent, while rates for graduate students would be about 5.2 percent and for parents would
be about 6.3 percent, according to the aides. That would have been a decrease for everyone, as rates now are 6.8 percent
for undergraduates and 7.9 percent for graduate students and parents.¶ The tentative agreement was the result of
discussions between Sen. Tom Harkin (D-Iowa), chairman of the education committee, Majority
Whip Richard J. Durbin (D-Ill.) and six senators who had previously sponsored a
similar bill.¶ Senators involved with the plan hope that they can tweak these
numbers and find a plan that both parties can agree upon, according to the aides.
They were confident that this development would not derail the
negotiations.
Will pass - bipartisan talks
Barrett 7/10 (Ted, CNN Politics, “Senators hope for student loan deal soon as rate doubles”,
http://www.cnn.com/2013/07/08/politics/student-loans, 7/10/2013)//SLR
A Democratic measure to temporarily reverse the
doubling of interest rates
short in the U.S. Senate on Wednesday, but
there was hope a bipartisan deal would be struck soon to remedy the
situation. "We're trying to find some common ground," said Sen. Richard
Durbin of Illinois, the No. 2 Democratic leader who spearheaded fresh talks on the dispute. "We don't have an
agreement and I can't say when or if we'll come together." Sen. Richard Burr of North Carolina, a GOP
member of the group seeking a deal, believes there are some options that
"seem to pique a lot of interest in a bipartisan way."
on millions of government-backed student loans fell
Will pass - White House pushing and bipartisan negotiations
Barrett 7/10 (Ted, CNN Politics, “Senators hope for student loan deal soon as rate doubles”,
http://www.cnn.com/2013/07/08/politics/student-loans, 7/10/2013)//SLR
Bipartisan talks were triggered after top White House officials, including Chief of
Staff Denis McDonough and Education Secretary Arne Duncan, met with Senate Majority Leader
Harry Reid and other Democratic leaders Tuesday night. Negotiations are
aimed at sifting through the various proposals for interest rates, surcharges,
and whether to mandate a cap on how high rates could rise, a key demand
from Democrats. "These things move in tandem," explained Durbin. "As you lower the cap you raise the rates.
And vice versa. As you raise the cap you lower the rates. So we're trying to find the right spot that works for everyone and
we're still working on it." Sen. Tom Carper, another member of the bipartisan group, said Republicans appeared ready to
compromise by accepting a rate cap. "There is a good spirit and I think the interest is in
finding a way to yes," the Delaware Democrat said. House Republicans, who prefer that markets set rates,
pushed through a measure in May that ties rates to the bond market and caps them at 8.5 %. This summer's
fight is similar to the one that took place last year when Congress acted to
avert an increase in the middle of a presidential campaign.
Will pass – bipartisan talks
LA Times 7/10 [“Plan to reverse student loan interest rate hike blocked in Senate,” Los Angeles Times,
http://www.latimes.com/news/nationworld/nation/la-na-student-loans-20130711,0,1391344.story]//MY
WASHINGTON — Senate Democrats failed again Wednesday to pass their plan to lower the interest rate for some college loans, forcing
lawmakers to choose between adopting another plan many consider burdensome for students or leaving the current higher rates
temporarily in effect, to their own political detriment. A bloc of Republicans — joined by Sens. Joe Manchin III (D-W.Va.) and Angus King
(I-Me.) — voted against a procedural step that would have cleared the way for the Senate to approve a plan to reinstate lower interest rates
on subsidized Stafford loans for one year. An identical plan to maintain the 3.4% rate also fell short more than a month ago, but Democrats
wanted to try again after the rate doubled to 6.8% June 30. One year after President Obama successfully rallied young supporters to
pressure Congress to enact a similar extension, Democratic leaders are finding the politics complicated by the White House's proposal,
which would tie the interest rate to the market. House Republicans adopted a similar approach in a student loan bill they passed in May.
House Speaker John A. Boehner (R-Ohio) said the Senate vote showed Democrats were "content to leave students and their families with
higher borrowing costs." He called on Obama to "address the divisions within his own party." The White House said it supported the Senate
Democrats' plan to enact a temporary fix. But the administration's initial proposal called for linking student loan rates to the 10-year
Treasury rate, with different surcharges for subsidized and unsubsidized Stafford loans and PLUS graduate loans. With bond rates likely to
rise as the economy improves, however, Democrats warned that returning to a market-based plan for calculating student loan interest, as
was done until 2006, would almost certainly lead to rates higher than the 6.8% that students would face this fall without congressional
action. Congress will take up the reauthorization of the Higher Education Act later this year, and Senate Democrats argued that the loan
issue should be part of a comprehensive overview of federal aid programs for higher education, including Pell grants. But without sufficient
Senate leaders signaled they would work with a bipartisan group led by
adapt their proposal in a way that would provide protections for
students against high rates. Senate Majority Leader Harry Reid (D-Nev.) said Wednesday that negotiations were
advancing on what he called an "imperfect" solution. But, he said, "it will be a way for us to
move forward." Manchin said talks were in a "very productive mode" and Wednesday's vote would focus
them. Sen. Richard M. Burr (R-N.C.), another key negotiator, said the Congressional Budget Office was reviewing
variations of a plan that had emerged from new talks. A revised plan could come to a vote
within a week if all sides can agree on a final proposal. But Democratic aides said the talks were tentative at best, with many in the
support for that approach,
Manchin, King and Sen. Lamar Alexander (R-Tenn.) to
caucus believing that leaving rates at 6.8% might be preferable to a plan that would eventually lead to higher rates. At a time when Congress
is under pressure to limit spending, the loan issue invited a debate over whether student borrowing should be a moneymaker for the federal
government. Some of the market-based proposals would bring in hundreds of millions in new revenue at the expense of lower- and middleclass students. The House Republican plan, for instance, would generate $4.7 billion over 10 years. A report from the Joint Economic
Committee concluded that the higher rate for Stafford loans, which accounted for more than a third of all student borrowing in the 2011-12
academic year, would add $4,500 to the cost of a four-year degree for students who borrowed the maximum amount. King contended that
continuing with an arbitrary rate also posed risks to students. "If Congress tries to set a rate, it will always be wrong," King said, noting that
even the recent 3.4% rate was higher than what a market rate would have been. The plan passed by the House has slightly higher surcharges
than Obama initially proposed, but set an overall cap of 8.5% to protect student borrowers against significant rate increases. Under the
president's plan, rates would be locked in for the life of a loan; under the House plan, they would reset each year. Any
compromise
plan would probably bridge the differences between the two. Democrats continue to
insist on a cap that would limit the revenue generated by student loan programs. "The
search now is for some kind of cap or protection on the upside," King said, and the objective is
to "allow lower rates generally for students in the long run."
AT Senate Dems Opposed
Senate Democrats already caved on tying rates to the market
Condon 7/19
Stephanie, Student loan deal meets resistance from the left, http://www.cbsnews.com/8301-250_162-57594464/studentloan-deal-meets-resistance-from-the-left/?pageNum=2
The deal would set undergraduate interest rates at 3.85 percent for another
year. The borrowing rate would be 5.4 percent rate for graduate students and 6.4 percent for parents. After that,
however, the rates would rise with the market. Undergraduate interest rates
for the next 10 years would be capped at 8.25 percent, the graduate interest rate cap would be
set to 9.5 percent, while the parent borrowing rate would be capped at 10.5 percent.¶ Liberals have
adamantly opposed tying rates to the market, and even though the
compromise sets caps for how high the rates can rise, activists think Democrats
effectively caved to Republicans on the matter.
Key Democrats signaling support
Condon 7/19
Stephanie, Student loan deal meets resistance from the left, http://www.cbsnews.com/8301-250_162-57594464/studentloan-deal-meets-resistance-from-the-left/?pageNum=2
The legislation as has been presented to me isn't everything I want, but it's a work of a
number of Democratic and Republican senators working long, long hours,"
Senate Majority Leader Harry Reid, D-Nev., said on the Senate floor Thursday. He noted that the senators who negotiated
the deal met with President Obama Tuesday night for about 90 minutes.¶ "We have to get this done as
soon as possible," Reid said. The Senate is expected to vote on the measure early next week.¶ Sen. Tom
Harkin, D-Iowa -- a key player in the negotiations -- expressed his
dissatisfaction with the measure but suggested there were few other options
left. The Senate could change student loan rates again later, he said.
Top of Agenda
Our evidence indicates that the Senate will vote on the student loan bill no later than this
week and then it will go to the House - it must be done before the August recess to ensure
rates don’t increase – guarantees it’s top of agenda
AT Farm Bill
Farm bill deadline is September 30 – Congress will deal with student loan
rates first
Cassata 7/8
Donna, Associated Press, Immigration, student loans top Congress’ agenda, http://www.postgazette.com/stories/news/us/immigration-student-loans-top-congress-agenda-694655/?print=1, MJ
Reid has made it clear that an extension of the current farm law, passed in 2008, is unlikely as he presses the House
to pass the Senate version of the bill. That leaves Boehner to figure out the next step before the current policy
expires Sept. 30. Congress also must figure out what to do about interest rates
on college student loans, which doubled from 3.4 percent last Monday because of
partisan wrangling in the Senate. Lawmakers promised to restore lower
rates when they return this week, both retroactively and before students start signing loan documents
later this summer. For now, the rate stands at 6.8 percent, which is higher than most loans available from private lenders.
AT Immigration
No immigration legislation till fall
Werner 7/19
Erica, Immigration reform backers plan August campaign to push passage, http://www.huffingtonpost.com/2013/07/19/immigrationreform-august_n_3622640.html
WASHINGTON — Backers
of comprehensive immigration legislation are gearing up
for a campaign to push the House to act, even as some begin openly voicing fears they're already losing the
fight.¶ Congress' month long August recess could be crucial and supporters aim
to exert influence in dozens of congressional districts home to Republican House members seen as open to reform.¶ Business
and religious groups and others with ties to the GOP majority are under pressure to win over lawmakers through tailor-made campaigns
from within their districts, involving ministers, local executives and other contacts. Immigration activists, labor leaders and others on the
left are making plans for larger-scale mobilizations such as rallies and marches to exert pressure from without. ¶ "Here's the fact: We're not
winning, so we've got to wage a campaign," said Sen. John McCain, R-Ariz., a lead author of the Senate-passed immigration bill. "There are
many members of the House that don't want to take up any bill at all, as you know. What our job is, we want to convince them to at least
pass legislation, so that we can go to conference and work together."¶ The scenario supporters hope to avoid is what happened to President
Barack Obama's health care bill in the summer of 2009, when it was savaged by irate voters at unruly town hall meetings, taking a beating it
never really recovered from.¶ "August
is a month in which either legislative proposals die,
or they survive," said Sen. Robert Menendez, D-N.J. He said those who favor immigration
legislation must be heard in August. "And if we do that, we'll be well positioned for
the fall in the House. If we don't, then we run a risk." Immigration legislation, a top priority for
Obama, has been in limbo since the Senate last month passed a sweeping bill with provisions aimed at securing the border,
requiring employers to verify their workers' legal status, allowing many more workers into the country legally, and offering eventual
citizenship to the 11 million immigrants already in the country illegally. ¶ Many members of the House's Republican majority oppose
citizenship for people who crossed the border illegally or overstayed their visas, and House Speaker John Boehner, R-Ohio, has ruled out
taking up the Senate bill in the House. Instead, he's declared that the House will move in a piecemeal fashion, beginning with border
security.¶ Although Boehner
had hoped for House action on immigration before
August, that goal is no longer in sight. He reiterated Thursday that the House must address the issue. When
and how remained unclear, although Boehner said he hoped to see the House pass something before Congress next confronts raising the
debt ceiling, which is expected sometime this fall.
Obama Pushing
Obama pushing – he’s been key to forging a compromise bill in the Senate
Epstein 7/18
Jennifer, Obama supports compromise for lower student loan interest rates,
http://www.politico.com/politico44/2013/07/obama-supports-compromise-for-lower-student-loan-interest-168674.html
President Barack Obama supports the Senate's compromise to restore a lower
interest rate for new student loans, a senior administration official said Thursday.¶ A
bipartisan group of senators has agreed to a plan that would keep rates
below 4 percent through 2015, and apply retroactively to July 1, when rates doubled
from 3.4 percent to 6.8 percent.¶ The White House was closely involved in the talks to
reach the agreement, the administration official said. A group of senators involved in the
talks met with Obama and Vice President Joe Biden on Tuesday at the White House.¶ In negotiations,
Democrats were insistent that the final bill not set up a system that would profit off students — as a Democratic official
said the House-passed bill and an early proposal from Senate Republicans would have.
Obama will push for student loan legislation
China Weekly 7/9
White House urges Congress to act “quickly” on student loan rates hike,
http://news.xinhuanet.com/english/world/2013-07/09/c_132523269.htm, MJ
WASHINGTON, July 8 (Xinhua) -- The White House on Monday urged U.S. Congress
to act
"quickly" on student loans legislation, a week after lawmakers failed to strike a deal to prevent rates
from doubling.¶ "We expect and hope that Congress will fix this problem, quickly," said White House spokesman Jay
Carney.¶ Carney said the administration would "work with the Senate and the
House" to reach a deal and believed there were "a variety of ways to reach that solution."¶ "There's a way to
do this retroactively so students are spared from having their rates double," he said.
Obama key – past fights over student loan rates prove
Welsh 6/28
Teresa, Should Congress allow student loan interest rates to double?,
http://www.usnews.com/opinion/articles/2013/06/28/should-congress-allow-student-loan-interest-rates-to-double, MJ
Student loan interest rates are set to double July 1, from 3.4 percent to 6.8 percent but a
gridlocked Congress has yet to act to prevent the hike from taking effect.¶ The interest rate increase on
Stafford loans would bring subsidized loans up to the same rate as unsubsidized ones for any new undergraduates seeking
assistance financing college. In 2007, both types of loans had an equal interest rate of 6.8 percent, but a bill in Congress
gradually reduced the subsidized rate, reaching 3.4 percent in 2011. Its aim was to make college more affordable and was
to last until 2013, but the reduced rates were ended for budgetary reasons and the law's
expiration was moved to 2012. Last
June, it was extended one year in a compromise
after President Barack Obama encouraged Congress to keep the lower rates.¶ The July 1
rate hike would not affect those who have graduated but are still paying back their loans.
PC Key
PC key – pressure from Obama got Republicans on board last year
Lillis 12
Mike, GOP ‘folded’ on student loans due to pressure from Obama, April 27,
http://thehill.com/homenews/house/224259-pelosi-gop-folded-on-student-loans-due-to-pressure-from-obama, MJ
House Republicans "folded" to pressure from President Obama to extend low rates
on certain student loans, House Minority Leader Nancy Pelosi (D-Calif.) charged Friday. Pelosi said Obama's public
campaign to prevent interest rates on federally subsidized Stafford loans from doubling this summer
was "too hot" for Republicans to handle, leading GOP leaders to schedule their hasty Friday vote to
keep the lower rate. "The Republicans have folded because the president made the issue too hot to handle. That is why the
bill is coming up today," Pelosi said during a press briefing in the Capitol just hours before the vote. " They felt the
heat of the president going out there and saying, 'We cannot allow [the rate hike] for families trying to send
their kids to college. So the timing is their folding." continued… With both sides now advocating a one-year extension of
the 3.4 percent rate, the fight is now over how to pay for it.
Obama is a key part of the negotiations on student loan interest rates
Everett & Raju 7/17
Burgess & Manu, Deal reached on student loans, http://www.politico.com/story/2013/07/student-loan-rates-senatedeal-94337.html
Key Senate negotiators met with President Barack Obama in the Oval Office
on Tuesday afternoon for an hour to discuss a solution to the doubling of
subsidized student loan rates. The president met with Alexander, Richard Burr (R-N.C.), Tom Coburn (R-Okla.), Tom Harkin (D-Iowa), Joe Manchin
(D-W.Va.), Angus King (I-Maine) and Durbin (D-Ill.), who has been acting as a facilitator in the bipartisan talks.¶ Subsidized rates doubled to 6.8
percent July 1 and the Senate has been unable to pass a bill to deal with the
issue. Previously, Democrats wanted to extend the 3.4 percent rate for those loans for a year but could draw no GOP support. But now with Senate rules changes staved off, the
White House is working closely with Congress to resolve the loans impasse
before the August recess and the start of the fall semester, when students begin signing their loans.
Economy Impact
Econ Internal Links
Failure to decrease rates on federal loans will force more into the riskier
private market
Campus Progress 7/1 [“Is Private Student Loan Debt the Next Big Financial Crisis?,” Campus Progress,
http://campusprogress.org/articles/is_private_student_loan_debt_the_next_big_financial_crisis/]//MY
On Tuesday morning, the
Senate Committee on Banking, Housing and Urban Affairs held a
hearing on private student loans. The hearing comes on the heels of a Consumer Financial Protection Bureau (CFPB)
proposal to oversee large student loan servicers and report on affordable private student loan repayment. Those who testified on Tuesday
included Rohit Chopra, the student loan ombudsman at the CFPB; John Lyons, chief national bank examiner at the Office of the
Comptroller of the Currency (OCC); Todd Vermilyea, senior associate director at the Federal Reserve’s Banking Supervision and Regulation
division; and Doreen Eberly, risk management supervisor director at the Federal Deposit Insurance Corporation (FDIC). Student
loan debt in the U.S. is second only to mortgage debt, ringing in at $1.1 trillion, and
delays the accomplishment of many important life markers, most notably the purchase
of a first home. Most student loans are federal, but 15 percent of outstanding debt belongs to private lenders, and
private lenders originate six percent of new loans. According to Sen. Tim Johnson (D-SD) the private student loan market is worth $150
private student loans don’t always offer income-based repayment
options or loan forgiveness programs. This fact is even more troubling because 81 percent of high-debt undergraduate
borrowers use private loans. Sen. Jack Reed (D-RI) called student loan debt “the next big financial crisis,” saying
that it could have a “lasting impact on our economic growth and prospective for the next
generations.” Lyons said, “We expect national banks and thrift lenders to provide flexibility to lenders.” He went on to list
billion. Chopra testified that
forbearance, modification programs, and extended grace periods as examples of this flexibility. “Private loans may be small, but they are
important,” Lyons said. “The FDIC supervises private student loan lenders using the same framework of safety and soundness and
consumer protection rules, policies and guidance as other loan categories,” Eberly testified. “While
the overall
performance of these private student loans is satisfactory, we understand that many borrowers
are currently having difficulty repaying their loans.” Sen. Mike Crapo (R-ID) said that he saw no conflict
between regulations and helping students, and that he hoped to better understand how to reconcile helping struggling student borrowers
with keeping our financial system sound. Though there was speculation that Troubled Debt Restructuring (TDR) rules might limit a bank’s
ability to modify student loans, all witnesses confirmed that current regulatory guidance permits such modification. Banks are free to work
with customers, provided all record keeping is accurate. Similarly, the FDIC does not prohibit refinancing. “It is not clear why this
[refinancing] isn’t happening more, our regulatory policy would certainly permit it and indeed encourage appropriate work outs. Like the
FDIC, we’re interested in exploring this further,” Vermilyea said, speaking on behalf of the Federal Reserve. Several witnesses hypothesized
that if
federally subsidized Stafford student loan rates double on July 1, we will see a growth in
the origination of private student loans as well as a general increase in the attractiveness of the private product. But
Eberly countered that students would continue to attempt to exhaust their federal loan options first before moving on to private ones.
Failure to decrease the rate will slow the economy
CBS News 7/1 [“Student loan interest rates double without Congress action: How it impacts the economy,” CBS
News, http://www.cbsnews.com/8301-505268_162-57591761/student-loan-interest-rates-double-without-congressaction-how-it-impacts-the-economy/]//MY
(CBS News) Congress has failed to hash out a solution on student loan borrowing, and that
means starting Monday, interest
rates on government-funded student loans will double from 3.4
to 6.8 percent. The jump will affect the seven million people who will take out a
loan this year, but will not impact people who already have loans. The jump is as a result of Congress' inability to
percent
agree on a methodology on student loan interest, CBS News contributor and analyst Mellody Hobson explained on "CBS
This Morning." She said, "They could come up with some kind of solution that would be
retroactive to today, and so, it's not over yet, but the bottom line is there's a big dispute.
The Democrats say, 'Let's delay this for one year, keep rates the way they are.' The Republicans say, 'Let's not have rates
jump and be out of control, but let's come up with some method that ties the rates to real interest rates.'" But whatever
the jump in interest and student loan debt, as a whole, has a potential effect on
the larger economy -- and the signs are already surfacing, particularly with spending.
"(The debt) is causing people to delay starting families, buying cars, buying homes." Years
ago, Hobson noted, the more education you had, the more likely you were to own a home. Now, because of the
debt, the more education you have, people are less likely to own a home -- 36 percent
less likely if you have student debt. "Just buying a house and starting a family has
the decision,
$145,000 in economic activity tied to it," Hobson said. "And so not doing that, could slow
down the economy."
Student loans are the next economic bubble - decreases consumer spending
and home ownership – higher rates exacerbate the problem because more
students default
Velikov 12
Georgi, 4-9-2012, Next economic bubble to burst: student loan crisis, http://www.thehillnews.org/?p=5367, MJ
In a recent report, the Federal Reserve announced that the amount of student loan debt had surpassed
credit card debt and auto loans. Currently, the Fed estimated that student loan debt is at almost $1
trillion and might be one of the reasons responsible for a sluggish economic recovery. A
year ago, famous banker John Paulson warned that student loans might be the next bubble in
US economy. This is the first time student loans have exceeded $1 trillion dollars and Paulson says the reason for
that is the poor economy. Ever since then, economists have argued for and against Paulson’s opinion. Some say that
student loans will not cause a problem while others say that this is a disaster. Stefan Karaboev, economic analyst
at the Center for the Study for Democracy had examined the issue and argues that student loans might be the
next
bomb for the U.S. economy. After reading John Paulson’s warnings, he decided he would take a look at
the issue. He is now concerned with the long-term effect that current conditions might lead to. According to Karaboev,
recent graduates have problems finding a job right after college due to the state our economy is in. Furthermore, this
leads to less apartment rents and less first homes bought by those students. This
new spiral leads to less consumer spending, a low demand for housing and
of course, higher default rates on student loans. continued…Currently, there is a discussion
on student loan interest rates. The government warned that this summer interest rate agreement expires and some
economists predict that the student loan rate might double after that from 3.2 percent to 6.5 percent.
They view this increase as
their payments.
a huge problem that might cause more students to default on
Higher student loan rates increase debt and push students into risker
private markets - this has long-lasting economic impacts
Flanagan 7-11 (Glen Luke Flanagan IVN “Increased Student Loan Rates Will Have Lasting Impact on Economy” 711-13
http://ivn.us/political-policy/2013/07/11/increased-student-loan-rates-will-have-lasting-negative-impact-on-economy/
Researched: 7-16-13)
After the interest rate for subsidized Stafford loans went from 3.4 percent to 6.8 percent at the beginning of the month,
student advocacy groups vowed not to take the increase lying down. The new rate “will cause the average
college student to pay an extra $1,000 per year, per loan,” according to Robert Applebaum, executive
director for StudentDebtCrisis.org. For that reason, Applebaum says his organization and others plan to fight the issue
until Congress is forced to pass an extension of the previous interest rate. It may not be an easy fight, as the Senate failed
in an attempt to lower rates on Wednesday. Sophia Zaman, vice president of the United States Student Association, made
a similar estimate, adding that students could expect to pay a total of $4,000 extra over the
lifetime of a loan. Some estimates are not as drastic, but still raise concern. Jon Fansmith, associate director of the
American Council on Education, said the average student loan borrower could expect to see his or her monthly payments
increase by $25 if Congress doesn’t act. “Since subsidized loans go to students with demonstrated
financial need, the increase is hitting the very students who can least afford it,” he pointed
out. These calculations would increase yearly payments by $300, rather than $1,000. Besides putting a financial
burden on students ill-prepared to carry it, the increase in federal rates might push
students to take out risky private loans, according to Shannon Gallegos, communications coordinator for
the Institute for College Access and Success. “Private loans are one of the riskiest, most expensive
ways to pay for college,” she said. “Like credit cards, they typically have variable interest rates that are higher for
those who can least afford them, and private loans do not provide the important deferment, income-based repayment, and
loan forgiveness options that accompany federal student loans.” All sources agreed that no one really wants to see loan
rates double, but inaction may continue due to what Fansmith described as “fundamental disagreements” within Congress
about the best ways to resolve the issue. While the increase would result in more revenue for the government, activists
question if it’s right to profit off a program intended to help students in need. That concern becomes particularly poignant,
given that the government is already set to make $50 billion from student loans this year, according to the Congressional
Budget Office, and that’s based on the 3.4 percent interest rate. “We
should be investing in our nation’s
students and ultimately next generation of leaders,” Zaman said. “Not treating them as profit
margins.” Burdening America’s future workers and leaders is a concrete concern, as Gallegos pointed out with data
from the Federal Reserve Bank of New York. While educated people are more likely to buy homes, a
survey of 30-year-old Americans showed that those with student loan debt were less
likely to have mortgages, meaning that graduates might be putting off important
economic and social steps like home ownership until they can pay down their student
loans. In other words, what might seem like a small thing now — an extra $300 or $1,000 a year —
could have a long-lasting impact, affecting when Americans are ready to make big
purchases like cars and homes, and when they start families of their own. Zaman put it bluntly:
“If we don’t invest in students now, we’re crippling our nation’s economic future,” she
said.
Rate jump impacts the spending behavior of 7 million people – it’s a drag on
the economy
Cochran 7-1 (Amanda Cochran CBS News “Student loan interest rates double without Congress action: how it
impacts the economy” July 1 2013 http://www.cbsnews.com/8301-505268_162-57591761/student-loan-interest-ratesdouble-without-congress-action-how-it-impacts-the-economy/ Researched: 7-16-13)
(CBS News) Congress has failed to hash out a solution on student loan borrowing, and that means starting Monday,
interest rates on government-funded student loans will double from 3.4 percent to 6.8 percent. The jump will
affect the seven million people who will take out a loan this year, but will not impact people who already have
loans. Student loan rates set to double as lawmakers continue bickering Battle brewing over student loan rate reform The
jump is as a result of Congress' inability to agree on a methodology on student loan interest, CBS News contributor and
analyst Mellody Hobson explained on "CBS This Morning." She said, "They could come up with some kind
of solution that would be retroactive to today, and so, it's not over yet, but the bottom line is there's a big dispute.
The Democrats say, 'Let's delay this for one year, keep rates the way they are.' The Republicans say, 'Let's not have rates
jump and be out of control, but let's come up with some method that ties the rates to real interest rates.'" But whatever the
decision, the jump in interest and student loan debt, as a whole, has a potential effect on
the larger economy -- and the signs are already surfacing, particularly with spending. "(The
debt) is causing people to delay starting families, buying cars, buying homes." Years ago,
Hobson noted, the more education you had, the more likely you were to own a home. Now, because of the debt, the
more education you have, people are less likely to own a home -- 36 percent less likely if
you have student debt. "Just buying a house and starting a family has $145,000 in
economic activity tied to it," Hobson said. "And so not doing that, could slow down the
economy.
More student loan debt hurts key sectors - housing and auto industry
US News 13 (“Are Student Loans Ruining the Economy?” U.S. News and World Report, 5/29/13,
http://money.usnews.com/money/blogs/my-money/2013/05/29/are-student-loans-ruining-the-economy)//SR
It’s no secret tuition increases are straining the finances of young adults. Student loan debt has nearly
tripled over the last eight years. The total amount of money in student loans owed by Americans is more than $1 trillion
how long can young adults sustain steep increases in
tuition? The national economic performance over the last five years has been disappointing. A
recent article published by the Federal Reserve Bank of New York, “Student Loan Borrowers Retreat from
the Housing and Auto Markets,” offers insight into the stagnation. Some of its findings include: Home
purchases. Student loans aren’t just the key to obtaining an academic degree; they’re also
the key to buying your first home. In the past, young adults with student loan debt were more likely to buy a
and has exceeded credit card balances. Just
house than those without student loan debt. In fact, in the years leading up to the recession, a gap emerged between
homebuyers with student loans and those without. The gap grew as high as 14 percentage points in 2008, and then the
paradigm shifted. Homeownership rapidly decreased among those with student loans until those
Home building and remodeling in the United
is a large engine for job growth. Yet homeownership might not be the only large
purchase young adults are forbearing. Auto purchases. Fed Reserve Bank researchers have found
similar trends in vehicle and home purchases. Historically, those with student loans have purchased cars
without student loans were buying homes in greater proportion.
States
in greater proportions than those without student loans. However,
consumer behaviors shifted starting in
those with no student loan debt were purchasing cars in greater
proportion to those with outstanding student loans. Cars purchases help fuel employment and
growth in a number of industries across the country. But the sudden absence of many firsttime homebuyers and car buyers is having a dramatic effect on the economy. Credit
scores may be to blame. Although student loan debt payments constrain household budgets, the high cost of
2008, until 2012 – when
college education may not be the only negative factor facing today's young adults. As debt levels rise, wage growth for
college graduates has remained stagnant when adjusted for inflation. Consequently, student loans are having painful
consequences on the credit scores of young adults. Those with student loans saw substantial decreases in their credit at the
same time banks implemented stricter credit requirements for loans. For example, in the wake of the recession, the
Federal Housing Administration raised its minimum credit score requirement to 580. (Many banks require a score as high
as 640 for an FHA mortgage.) According to the study, the average credit score in 2012 for a 25-year-old college graduate
with student loan debt was around 625, compared to 640 for a 25-year-old with no student debt. Student loans
could be pushing graduates out of the lending market – making it harder to afford big purchases.
Consumer habits among young adults are shifting due to generational differences. A February 2013 survey by Zipcar
showed young adults favor technology such as smartphones or computers over vehicles. As student debt rises, college
graduates will continue feeling the strain on their credit, but what really matters is what strategies
recent college graduates will employ to offset their student loan debt.
Failure to lower rates will severely impact all sectors of the economy –
student loan debt is uniquely bad
Barkley 13 – (Whitney, “Student Debt Crisis Deepens”, The Nation, 7/12,
http://www.thenation.com/blog/175235/student-debt-crisis-deepens#axzz2Z3EERX7t)//mm
On July 1, interest rates on subsidized federal student loans doubled, adjusting from 3.4 percent to
6.8 percent overnight. That means that the
already economy-busting student loan issue just got a
whole lot worse. And a legislative attempt to bring the rates back down failed this week. Americans have $1.1 trillion
in outstanding student loan debt, more than credit card debt or car loans. And unlike those debts, it’s nearly
impossible to get out from under student loans—borrowers usually can’t discharge it in
bankruptcy, refinance it or modify the loan. There’s no time limitation on collecting a student debt. In
fact, students who become disabled can even have their social security payments
garnished to pay off their education loans. It’s a system that Salon’s David Dayen refers to as
indentured servitude—because unlike other types of loans, you literally cannot break free
until you have worked off the debt. This is particularly true for students in states like Mississippi, where 54
percent of students have college loan debt and, on average, graduate with about $24,000 in student loans. With the
national unemployment rate for new college graduates holding steady at around 8
percent, our best and brightest are left with a terrible choice: try to start making
payments while unemployed or underemployed or go to graduate school, taking out
more loans in the process. It’s a financial burden that will weigh down all sectors of the
American economy. People who earned college diplomas used to be more likely to become homeowners than those
without—now, college graduates with student loan debt are 36 percent less likely to own a
home. They are also less likely to purchase cars or start small businesses and more likely
to delay starting families. Instead of contributing to the state and national economy,
those with student loans are contributing only to the narrowest of financial balance
sheets—those of debt collectors and banks.
Consumer Spending K2 Econ
Collapse of consumer demand increases the job deficit—prevents economic
recovery
Tyson 11 [Laura, Washington Post, “What it will take for President Obama and big business to bring back American
jobs,” http://www.washingtonpost.com/national/on-leadership/for-president-obama-and-american-business-fixing-theus-jobs-deficit/2011/08/18/gIQAhW8ZNJ_story.html]//MY
The immediate crisis confronting the U.S. economy is the jobs deficit, not the budget deficit.
Nearly 14 million Americans are unemployed, another 8.4 million are working part time because they cannot find fulltime jobs, and yet another 2.8 million want a job and are available to work but have given up an active search. At 64
percent, the labor force participation rate is lower than it has been in nearly three decades.
The magnitude of this jobs crisis we’re in is best measured by the jobs gap—the number of jobs the U.S. economy needs to
add in order to return to its pre 2008-2009 employment level and absorb new entrants to the work force since then. The
jobs gap at the end of August was more than 12 million jobs. Even at double the rate of employment growth realized
during the last year, it would take more than 12 years for the U.S. economy to close this gap. The U.S. labor market, long
admired for its flexibility and strength, is badly broken. Most American jobs are in the private sector, and private sector
jobs have in fact been growing for 17 consecutive months; indeed, the private sector added about 1.8 million nonfarm
payroll jobs during the last year. This pace of job creation is faster than during the previous recovery in the early 2000s
and in line with the recovery of the early 1990s. But there’s one major problem: Private-sector job losses were
more than twice as large in the recent recession as in the previous two, and job growth
has fallen far short of what is necessary to offset these losses. In addition, public-sector
employment has been declining in this recovery —this in contrast to other postwar recovery periods, in
which such employment has increased. We’ve lost 550,000 public-sector positions in the last year alone, making the
jobs crisis even more severe. Since the private sector creates (and eliminates) most jobs in the United States,
and since budget constraints will likely mean more painful cuts in public-sector
employment for the foreseeable future, Americans are understandably looking to business for solutions to
the jobs crisis. To uncover the business solutions that could work, however, we first must acknowledge the
fundamental cause of the problem: the dramatic collapse in aggregate demand that
began with the 2008 financial crisis and that triggered huge job losses. Even with
unprecedented amounts of monetary and fiscal stimulus, the recovery has been weak because
consumers have curbed their spending , increased their saving and started to reduce their personal debt.
And they still have a long way to go. Business surveys confirm that for both large and small companies, the primary
constraint on job growth is weak demand, not regulation or taxation. In the apt words of a small business owner, “If
don’t have the demand, you don’t hire the people.”
you
Consumer spending is 70% of GDP
UKE 10 [UKEssay, “International Politics and US China Relations,”
www.ukessays.com/essays/economics/international-politics-and-us-china-relations.php)]//MYThe appreciation of RMB will
harm U.S
consumers and U.S domestic consumer market, which contributes to 70% of
U.S’s GDP.
24 The
U.S is still recovering from the financial crisis. With the U.S unemployment rate at 10%, American
consumers have already been cutting their spending on consumer products. The last thing they want to see is a sharp increase in the price of
their living products. The price increase on U.S products will hinder consumer spending and economy recovery in the U.S. In addition,
American retailers such as Wal-Mart and Target will suffer with the increase in the price of products on their shelves. This will ultimately
affect many American corporations, such as Apple, Dell, and Mattel, which rely on American consumers.
Econ Competitiveness Internal
Higher student loan rates undermine economic competiveness
Price 11 (Margaret, “Big Squeeze for Grads: Student Loans Rise, Job Opportunities Slim,” 10/5/13,
http://www.csmonitor.com/Business/2011/1005/Big-squeeze-for-grads-Student-loans-rise-job-opportunities-dim)//SR
After losing a retail job in 2009, David Corgan of Coon Rapids, Minn., went to college to boost his job prospects. Now in
his mid-30s, the third-year student at a local community college faces the prospect of $35,000 in student debt once he
finishes up, he hopes, at the University of Minnesota. "It's terrifying," says Mr. Corgan, who is majoring in astrophysics. "I
know I can repay the debt. But whether it will improve my job prospects, that's hard to judge." Granted, a job in
astrophysics may be harder to land than, say, one in retail sales. Still, the squeeze Corgan is feeling is increasingly
common among college students and graduates in many majors. On one side, the costs of tuition have been
rising steadily, even as grant programs fail to keep pace with them. On the other side, job opportunities are scarce.
Finding good-paying jobs to repay those student loans has become a tall order. As of July, 13 percent of college grads ages
20 to 24 were unemployed. The squeeze could intensify if policymakers, now tackling the federal deficit,
trim education subsidies beyond the cuts already made. Already, students' growing debt burden
threatens their ability to spend as young adults and contribute to the economy. If high school
grads forgo higher education because its costs appear to outweigh its advantages, the
nation's long-term competitiveness will likely suffer . "The situation is bad, really
bad, and getting worse," says Rich Williams, higher education advocate at the U.S. Public Interest Research Group in
Washington, D.C. "About 10 to 15 years ago, only about one-third of students needed to borrow money to graduate" from
college, "and borrowers needed only about $12,000" on average, he says. Today, some two-thirds of college
students need loans. Their average borrowing exceeds $27,000, says Mark Kantrowitz, publisher of FinAid.org and
Fastweb.com. Last year, student-loan debt surpassed US credit-card debt. By January, says Mr. Kantrowitz, it's expected
to hit $1 trillion. To be sure, the default rate on federal student loans – at 8.8 percent in the 2009 fiscal year, according to
the Department of Education – is still below double-digit levels. Also, a number of forbearance and debt repayment
programs help former students manage loan repayments. Debt loads are "troubling for some students, but for the vast
majority of students they are not a problem," says Donald Heller, education professor at The Pennsylvania State
University in University Park. "But if the economy doesn't improve in two to three years, student
debt could become a much greater problem for the nation." Annabel Pollioni, one of eight children of a
financially struggling family, expects to graduate from Rutgers University in New Brunswick, N.J., with a political science
degree and $34,000 of student debt (counting borrowing at a previous college). The college senior is planning for a career
working for nonprofit organizations. This would lead to her goal – to run for US president – and help qualify her for
federal student loan forgiveness. Ms. Pollioni considers herself to be among the luckier students and believes her student
debt will be manageable. But to her, the debt problem nationally is "out of control." For many such borrowers, repayment
will be a long ordeal. "If your debt at graduation is less than your job's starting salary, you can repay the debt in 10 years,"
says Kantrowitz of FinAid.org, based in Cranberry Township, Pa. "But if you've needed to borrow more than that, a
repayment plan could stretch the loan out 20 years. About one-third of this year's college grads are in that situation:
They'll be paying back student loans when their children are ready for college." Political developments could
make matters worse. One of the few specific budget cuts put into this summer's compromise over the national
debt limit involved college loans. Starting next July, the US government will no longer subsidize interest on
federal Stafford loans for graduate and professional students, making the loans costlier for
some students. Another change: As of next July, incentives for repaying federal student loans on time will largely
disappear for both graduates and undergraduates. This fall, the congressional "super committee" charged with finding an
additional $1.5 trillion of spending cuts over 10 years could further nip at education. Some items that the committee might
at least weigh, some experts suggest: •Tightening some qualifications for federal Pell student aid grants. •Removing
interest rate subsidies needy undergraduates get (which keeps interest from accruing until students begin repaying their
loans). •Eliminating some educational tax credits. How much worse could the super committee make things for students?
"Every dollar in grants that gets cut likely translates into about $1 in [student] debt," estimates Kantrowitz. Steeper
loan repayments could have a broader economic impact, eating into the discretionary
spending of indebted graduates just when they'd otherwise be opening up wallets for
everything from homes to baby clothes. And at some point, national competitiveness could be hurt.
Those who "have trouble repaying loans can send signals to other students to pursue less
education," points out Cristian deRitis, a director in the West Chester, Pa., office of Moody's Analytics. "That
would have a broad economic impact" since "our economy needs an educated workforce to
grow and be internationally competitive ."
Slow Growth Scenario
Increased student loan debt results in slow growth
Lowrey 13 (Annie, “Student Debt Slows Growth as Young Spend Less,” New York Times, 5/10/13,
http://www.nytimes.com/2013/05/11/business/economy/student-loan-debt-weighing-down-younger-usworkers.html?pagewanted=all&_r=0)//SR
The anemic economy has left millions of younger working Americans struggling to get ahead. The added millstone of
student loan debt, which recently exceeded $1 trillion in total, is making it even harder for many of them,
delaying purchases of things like homes, cars and other big-ticket items and acting as a drag
on growth , economists said. Consider Shane Gill, a 33-year-old high-school teacher in New York City. He does not
hundreds of thousands of
others in his generation, he has put off such major purchases or decisions in part because of his debts.
have a car. He does not own a home. He is not married. And he is no anomaly: like
Mr. Gill owes about $45,000 in federal student loans, plus another $40,000 to his parents. That investment in his future
has led to a secure job with decent pay and good benefits. But it has left him with tremendous financial constraints, as he
faces chipping away at the debt for years on end. “There’s this anxiety: what if I decided I wanted to get married or have
children?” Mr. Gill said. “I don’t know how I would. And that adds to the sense of precariousness. There’s a
30year-olds with student loans were now less likely to have debts like home mortgages than 30year-olds without student loans — even though most of those with student loans are better educated
and can expect to earn more money over their lifetimes. The same pattern holds true for 25-yearolds and car loans. “It is a new thing, a big social experiment that we’ve accidentally decided to engage in,” said Kevin
persistent, buzzing kind of toothache around it.” The Federal Reserve Bank of New York, in a new study, found that
Carey, the director of the Education Policy Program at the New America Foundation, a research group based in
Washington. “Let’s send a whole class of people out into their professional lives with a negative net worth. Not starting at
zero, but starting at a minus that is often measured in the tens of thousands of dollars. Those minus signs have
psychological impact, I suspect. They might have a dollars-and-cents impact in what you can
afford, too.” The weak economy and tight credit standards remain the main culprits preventing young people just
establishing themselves from making major purchases. But millions now face putting a substantial share of their
take-home pay toward past debts rather than present needs. Student loan debt leaves them with less
money for things like clothes and restaurant meals. And it is even more likely to suppress
purchases of more expensive items that need to be bought with credit. A poor job market is compounding the
problem: the educational debt burden of many so-called millennials has sharply increased even as they are being forced to
get by on significantly less income than the previous generation — a decline of about 15 percent in real terms since 2000,
with much of that drop coming from the recession. According to calculations by the Pew Research Center, the
measure of debt to income for households under the age of 35 has ballooned to about 1.5-to-1 in 2010 from
about 1-to-1 in 2001. The composition of that debt has shifted, too: more is tied to student debts, and
less to homes. “Having a lot of student loan debt makes it harder to qualify for a mortgage and harder to save for a down
payment,” said Jed Kolko, the chief economist at Trulia. With the interest rate on some federal student loans set to double
on July 1, House Republicans and Senate Democrats have both put forward proposals to try to hold them down.
Representative John Kline, Republican of Minnesota, has proposed tying the rate on several federal student loans to the
government’s borrowing costs. Democratic senators, including Dick Durbin of Illinois, have made a similar proposal .
Some have suggested going further: Senator Elizabeth Warren, Democrat of Massachusetts, has proposed letting
at the same “discount rate” that the Federal Reserve charges to banks, currently
Student loan debt is not only constraining young adults, but also, at least in the near term,
students borrow
0.75 percent.
holding back the recovery itself , some economists say. The shadows might remain even as the
economy picks up, by making young workers more cautious when it comes to decisions about their careers and their
finances. Millennials might end up buying less expensive homes or more often choosing to rent than previous generations.
“The debt is shifting how much young people can spend, and it can also be a powerful psychological thing as well,” said
Selma Hepp, an economist at the California Association of Realtors. On the other side of the equation, many college
graduates now in their 20s and early 30s should eventually be able to make up for lost ground. Students who take on debt
to pay for higher education commit themselves to paying off huge sums, but they usually lift their lifetime earnings by
substantial amounts. And they are in a better position to insulate themselves against economic bad times, given the
profound rewards the job market provides to the college-educated. Indeed, the economy is far more punishing to workers
without a college degree. The college-educated earn, on average, 80 percent more than those who only completed high
school, a premium that has widened over the last 30 years. Unemployment rates for the less educated are higher, too. For
most young workers, gaining a college degree remains well worth it in the long run, even if it delays some purchases in the
near term. “For an individual going to college and ending up with a lot of debt — you’re still better off,” said Chris G.
Christopher of the forecasting firm IHS Global Insight. There might, however, be a slice of young workers who paid huge
sums for degrees that prove less valuable on the job market, saddled by a debt burden that could end up holding them
back for decades. Mr. Gill said his education remained a vital investment, even if the debt overhang has for now put white
picket fences or a condo with a gleaming view out of reach. “Sometimes I think: ‘What if I were to buy an apartment?’ ” he
said. “It is like asking: ‘What am I going to do when I first land on the moon? What’s the first thought that I will have when
I see Earth from outer space?’ ”
Slow growth results in great power wars
Khalilzad 11
PhD, Former Professor of Political Science @ Columbia, Former ambassador to Iraq and Afghanistan
(Zalmay Khalilzad was the United States ambassador to Afghanistan, Iraq, and the United Nations during the presidency
of George W. Bush and the director of policy planning at the Defense Department from 1990 to 1992. "The Economy and
National Security" Feb 8 http://www.nationalreview.com/articles/259024/economy-and-national-security-zalmaykhalilzad)
economic and fiscal trends pose the most severe long-term threat to the United States’
position as global leader. While the United States suffers from fiscal imbalances and low
economic growth, the economies of rival powers are developing rapidly. The
continuation of these two trends could lead to a shift from American primacy toward a multipolar global system, leading in turn to increased geopolitical rivalry and even war among the
great powers. The current recession is the result of a deep financial crisis, not a mere fluctuation in the business cycle. Recovery is likely to be
Today,
protracted. The crisis was preceded by the buildup over two decades of enormous amounts of debt throughout the U.S. economy — ultimately totaling almost
350 percent of GDP — and the development of credit-fueled asset bubbles, particularly in the housing sector. When the bubbles burst, huge amounts of
wealth were destroyed, and unemployment rose to over 10 percent. The decline of tax revenues and massive countercyclical spending put the U.S.
government on an unsustainable fiscal path. Publicly held national debt rose from 38 to over 60 percent of GDP in three years .
Without
faster economic growth and actions to reduce deficits, publicly held national debt is projected to reach dangerous proportions. If
interest rates were to rise significantly, annual interest payments — which already are larger than the defense budget — would crowd out other
spending or require substantial tax increases that would undercut economic growth. Even worse, if unanticipated events trigger what economists call a “sudden stop” in credit
markets for U.S. debt, the United States would be unable to roll over its outstanding obligations, precipitating a sovereign-debt crisis that would almost certainly compel a radical
It was the economic devastation of
Britain and France during World War II, as well as the rise of other powers, that led both countries to relinquish their
empires. In the late 1960s, British leaders concluded that they lacked the economic capacity to maintain a presence “east of Suez.” Soviet economic weakness, which crystallized
retrenchment of the United States internationally. Such scenarios would reshape the international order.
under Gorbachev, contributed to their decisions to withdraw from Afghanistan, abandon Communist regimes in Eastern Europe, and allow the Soviet Union to fragment. If the U.S. debt
the United States would be compelled to retrench, reducing its military spending and shedding
international commitments. We face this domestic challenge while other
major powers are experiencing rapid economic growth. Even though countries such as China, India,
problem goes critical,
and Brazil have profound political, social, demographic, and economic problems, their economies are growing faster than ours, and this could alter the global distribution of power. These
If U.S. policymakers fail to act and other powers continue to grow, it is not a question of
The closing of the gap between the United States and its rivals could intensify
geopolitical competition among major powers, increase incentives for local powers to play major powers against one another,
and undercut our will to preclude or respond to international crises because of the higher risk of escalation. The stakes are high. In modern
history, the longest period of peace among the great powers has been the era of U.S.
leadership. By contrast, multi-polar systems have been unstable, with their competitive dynamics resulting in frequent
crises and major wars among the great powers. Failures of multi-polar international systems produced both world wars.
American retrenchment could have devastating consequences. Without an American security blanket,
regional powers could rearm in an attempt to balance against emerging threats. Under this scenario, there would be a heightened
possibility of arms races, miscalculation, or other crises spiraling into all-out conflict.
Alternatively, in seeking to accommodate the stronger powers, weaker powers may shift their geopolitical posture away
from the United States. Either way, hostile states would be emboldened to make aggressive
moves in their regions.
trends could in the long term produce a multi-polar world.
whether but when a new international order will emerge.
These wars go nuclear
Harris and Burrows 9
*Mathew, PhD European History @ Cambridge, counselor in the National Intelligence Council (NIC) , **Jennifer, a
member of the NIC’s Long Range Analysis Unit
(“Revisiting the Future: Geopolitical Effects of the Financial Crisis”
http://www.ciaonet.org/journals/twq/v32i2/f_0016178_13952.pdf)
Increased Potential for Global Conflict
Of course, the report encompasses more than economics and indeed believes the
future is likely to be the result of a number of intersecting and interlocking forces.
With so many possible permutations of outcomes, each with ample Revisiting the
Future opportunity for unintended consequences, there is a growing sense of
insecurity. Even so, history may be more instructive than ever. While we continue
to believe that the Great Depression is not likely to be repeated, the lessons to be
drawn from that period include the harmful effects on fledgling democracies and
multiethnic societies (think Central Europe in 1920s and 1930s) and on the
sustainability of multilateral institutions (think League of Nations in the same
period). There is no reason to think that this would not be true in the twenty-first
as much as in the twentieth century. For that reason, the ways in which the
potential for greater conflict could grow would seem to be even more apt in a
constantly volatile economic environment as they would be if change would be
steadier. In surveying those risks, the report stressed the likelihood that terrorism
and nonproliferation will remain priorities even as resource issues move up on the
international agenda. Terrorism’s appeal will decline if economic growth
continues in the Middle East and youth unemployment is reduced. For those
terrorist groups that remain active in 2025, however, the diffusion of technologies
and scientific knowledge will place some of the world’s most dangerous capabilities
within their reach. Terrorist groups in 2025 will likely be a combination of
descendants of long established groups_inheriting organizational structures,
command and control processes, and training procedures necessary to conduct
sophisticated attacks_and newly emergent collections of the angry and
disenfranchised that become self-radicalized, particularly in the absence of
economic outlets that would become narrower in an economic downturn. The most
dangerous casualty of any economically-induced drawdown of U.S.
military presence would almost certainly be the Middle East. Although Iran’s
acquisition of nuclear weapons is not inevitable, worries about a nuclear-armed
Iran could lead states in the region to develop new security arrangements with
external powers, acquire additional weapons, and consider pursuing their own
nuclear ambitions. It is not clear that the type of stable deterrent relationship that
existed between the great powers for most of the Cold War would emerge naturally
in the Middle East with a nuclear Iran. Episodes of low intensity conflict and
terrorism taking place under a nuclear umbrella could lead to an unintended
escalation and broader conflict if clear red lines between those states involved are
not well established. The close proximity of potential nuclear rivals combined
with underdeveloped surveillance capabilities and mobile dual-capable Iranian
missile systems also will produce inherent difficulties in achieving reliable
indications and warning of an impending nuclear attack. The lack of strategic
depth in neighboring states like Israel, short warning and missile flight times, and
uncertainty of Iranian intentions may place more focus on preemption rather than
defense, potentially leading to escalating crises. 36 Types of conflict that the world
continues to experience, such as over resources, could reemerge, particularly if
protectionism grows and there is a resort to neo-mercantilist practices. Perceptions
of renewed energy scarcity will drive countries to take actions to assure their future
access to energy supplies. In the worst case, this could result in interstate conflicts
if government leaders deem assured access to energy resources, for example, to be
essential for maintaining domestic stability and the survival of their regime. Even
actions short of war, however, will have important geopolitical implications.
Maritime security concerns are providing a rationale for naval buildups and
modernization efforts, such as China’s and India’s development of blue water naval
capabilities. If the fiscal stimulus focus for these countries indeed turns inward,
one of the most obvious funding targets may be military. Buildup of regional naval
capabilities could lead to increased tensions , rivalries , and
counterbalancing moves , but it also will create opportunities for
multinational cooperation in protecting critical sea lanes. With water also
becoming scarcer in Asia and the Middle East, cooperation to manage changing
water resources is likely to be increasingly difficult both within and between
states in a more dog-eat-dog world.
AT Market Based Proposal Bad
The bipartisan bill keeps rates at 3% for this year and puts a cap on future
rates
Wolfgang 7/18
Ben, Bipartisan group of senators reaches deal on student loans, Washington Times,
http://www.washingtontimes.com/news/2013/jul/18/bipartisan-group-senators-reaches-deal-student-loa/
The Bipartisan Student Loan Certainty Act requires that, for each academic year, all
newly-issued student loans be set to the U.S. Treasury 10-year borrowing
rate (specifically, the yield on the 10-year note as determined by the last auction held before June of each year—not the
changing daily rate) plus add-ons to offset costs associated with running the program.¶ The resulting interest
rates for loans taken out this year, after July 1, 2013, would be 3.86% for subsidized and
unsubsidized loans for undergraduate students, 5.41% on unsubsidized loans for graduate students, and 6.41% on PLUS
loans for parents and graduate students. These rates would apply retroactively to newly issued loans taken out after July 1,
2013. The interest rate would be fixed over the life of the loan to provide
borrowers with certainty to plan for the future. ¶ Additionally, this bill
protects against the threat of unforeseen circumstances by imposing a cap to
ensure interest rates never exceed 8.25% for undergraduate students, 9.5% for graduate students, 10.5% for PLUS
borrowers. The Congressional Budget Office has determined this legislation would save taxpayers $715 million over ten
years.
Most students will pay less than last year
Huffington Post 7/18
Student loan deal set to increase borrowing costs, swell government profit,
http://www.huffingtonpost.com/2013/07/18/student-loan-deal_n_3619833.html
In the upcoming school year, undergraduate students will pay 3.86
percent for Stafford
loans under the government's student loan program. Graduate students will pay 5.41
percent for Stafford loans, and 6.41 percent for PLUS loans, which are used to finance education costs after Stafford limits
are exhausted. Parents who borrow to help their children attend college also will pay 6.41 percent.¶ Most
borrowers will pay less to finance a college education than under interest
rates that prevailed during the most recent school year, except for
undergraduate students from low- and moderate-income households, who
paid 3.4 percent. Other undergraduates had been paying 6.8 percent, while
graduate students had paid 6.8 percent and 7.9 percent for two types of loans, and parents paid 7.9 percent.
Current bill ensures reduced rates through 2015 and it can always be
changed if they go to high to high in future
Elliot 7/19
Phillip, Compromise averts doubling of student loan rates, for now,
http://www.prairiebizmag.com/event/article/id/15299/
At least for now. The compromise could be a good deal for students through the 2015
academic year, but then interest rates are expected to climb above where they were when students left campus in the
spring.¶ Even in announcing the compromise, it was clear the negotiations were dicey.¶ “While this is not the agreement
any of us would have written, and many of us would like to have seen something quite different, I believe that we have
come a very long way on reaching common ground,” Durbin told reporters.¶ Moments later, Democratic Sen. Tom
Harkin of Iowa, chairman of the Senate Health, Education, Labor and Pensions Committee, said he would
revisit the whole agreement this fall, when his panel takes up a rewrite of
the Higher Education Act.¶ “Can we change it? Sure, we can change it,” Harkin
said. “It’s not the Ten Commandments, for God’s sake.”
AT Debt Alt Caus
Loans are the primary cause of debt, not tuition costs
Greenstone & Looney 7/5
Michael & Adam, Rising student debt burdens: factors behind the phenomenon,
http://www.brookings.edu/blogs/jobs/posts/2013/07/05-student-loans-debt-burdens-jobs-greenstone-looney
The increase in loans and defaults over such a short time is puzzling. One possible explanation for
the
growing number of student loans is that tuition has increased, but the data
suggest otherwise. While the “sticker price” of attending college has
increased over the past decade and continues to do so, net tuition—the price
that the average student actually pays after financial aid—has increased at a
much lower rate. As we showed in earlier work, net in-state tuition and fees at public four-year colleges have
only increased by an average of $1,420 since 2002, which is less than half of the increase in the published rate of $3,450.
At private four-year colleges, published tuition has increased by an average of $6,090 since 2002, while net tuition has
only increased by $230. Overall, average net tuition has therefore increased only 8 percent over the last ten years—far
below the 77 percent increase in student debt. See the technical appendix for a description of the calculations behind this
and other figures cited in this report.¶ Similarly, rising debt is not simply the result of higher
student enrollment. The number of undergraduates (full-time and part-time) increased from approximately 14
million in 2002 to just over 18 million in 2011. Enrollment, while up, increased only 27 percent. ¶ This means that
neither college enrollment nor net college tuition has risen enough over the
past decade to explain the rapid upsurge in student debt. Instead, this
phenomenon seems to be driven by an increase in the share of student-loan
borrowing used to finance each dollar of college tuition.¶ The graph below shows how
undergraduate education was financed between 1990 and 2011, breaking down published tuition into aid (including
federal, non-federal, and private grants; work study programs; and tax credits), federal and non-federal loans, and the
remainder, which we call out-of-pocket costs. The graph shows that while the sticker price of tuition has increased
steadily, the net cost—represented as the sum of the green and blue areas—has been relatively flat.¶ By focusing on just the
blue and green sections of the graph, it is possible to observe the trends occurring within net tuition—how students and
families finance the tuition they are responsible for covering. It is evident that an increasing percentage of average net
tuition is being financed by loans, even though net tuition has not increased much in magnitude over recent decades. In
2000, the average student borrowed only 54 percent (or about $3,600) to finance their tuition, whereas over the past
three years, these loans have grown to nearly 75 percent (or $5,500) of net tuition costs.
STEM Impact
STEM Internal Link Ext
Higher costs to students discourages STEM education
Smoot 12
Geoff, April 29, 2012, http://www.delmarvanow.com/article/20120429/OPINION01/204290355, MJ
Doubling the student loan interest rate is another example of the lunacy of the tea party-led Republican Party. In the old
days, conservative meant someone who wanted to "go slowly" on change and make sure it conformed to the Constitution.
Today's pseudo conservative is a believer in religion as the answer to all questions -- including believing that
science is not too be believed about anything. That means discouraging education -which is exactly what happens when we make it more difficult for young
people who are not wealthy to enter undergraduate study, even in a public
college. The ramifications to our economy would not be realized until sometime later, when our high-tech
businesses would find they no longer had the human resources necessary to
do the work. We also would find missing a piece of the American success
story -- trained teachers, most of whom come from public universities and must borrow to go to school.
Today's conservatives and their friends in the 1 percent group, whose only goal is to oppose anything Obama, would have
us believe raising this rate is good, because it would help in the deficit fight. This is specious logic. It denies the future
benefits that come from an educated populace. That fits right into the anti-science, anti-evolutionist and reactionary
reading of the 2nd Amendment thinking these misinformed people believe. They should pray their
ignorance won't eventually turn America into the likes of the last days of the
Roman Empire.
Failure to lower rates decreases enrollment which is key to a skilled
workforce
Bergeron and Van Ostern 13 – Vice President for Postsecondary Education at CAP and former Deputy
Director of Campus Progress (David A. and Tobin, “A Comprehensive Analysis of the Student-Loan Interest-Rate Changes
that Are Being Considered by Congress”, Center for American Progress, 6/27,
http://www.americanprogress.org/issues/higher-education/report/2013/06/27/68237/a-comprehensive-analysis-ofthe-student-loan-interest-rate-changes-that-are-being-considered-by-congress/, p.6)//mm
The federal student-loan programs should operate in a manner that consistently puts
students first and rewards individuals for enrolling in and completing college. Among lowincome borrowers, who principally benefit from subsidized Stafford loans, student-loan debt burden can
stand in the way of enrolling and completing a degree or certificate. Keeping interest
rates low helps people get the postsecondary training required to adapt to new economic
realities and ensures that employers have the skilled workforce they need to compete. It
is time for Congress to adopt a comprehensive student-loan interest-rate approach
that lowers students’ debt burden compared to the current policy. Student-loan borrowers must
be better off than they would be if no action is taken and the subsidized Stafford student-loan rate doubles on July 1 to 6.8
percent.
Economy Impact
Skilled workforce key to growth and economic competiveness
Chapman 12 – (Ben, “New York Invests Heavily in STEM Education for Long-Term Competitiveness in Global
Economy,” New York Daily News, 12/4/12, http://www.nydailynews.com/new-york/education/stem/new-york-eyeseconomic-future-rooted-finance-sciences-article-1.1213453)//SR
It was early 2009, and New York was in a terrifying economic free fall that threatened the very future of the city. The stock
market had lost over half its value in just 18 months, and the financial firms that powered the local economy were losing
profits and workers like never before. If the city were to reverse the devastating loss, it would do so only by
shifting its focus away from Wall Street and to another industry. But in the end, there was one idea that
caught fire as New York’s clear best hope: STEM, or science, technology, engineering and mathematics. STEM is at
the center of a nationwide push to transform education — from the primary grades to graduate school — away
from the humanities and toward the sciences. And city officials settled on a plan to try to position the city as a
capital of the global digital economy by creating an educated, entrepreneurial workforce. “When we talked to leaders in
the private sector about diversifying the economy, we heard over and over that New York City did not have
enough engineering talent,” Steel said. Nearly four years later, New Yorkers are seeing the early results of that
multibillion-dollar education gamble. The city has created 22 new technical education high schools, with seven more
coming next year. There are hundreds of new STEM programs in public schools across the city at all levels. Construction is
about to start on a $2 billion Cornell genius school graduate program that’s designed to churn out the next generation of
tech entrepreneurs, and the City University of New York has rolled out dozens of new STEM programs since
2005. “It’s
about being competitive and helping to recruit and retain businesses in our city,” said CUNY
a huge opportunity for us to say to companies all over the world:
Come to New York City, and there will be enough people with the skills you need.” The STEM movement
Chancellor Matthew Goldstein. “It’s
— and the acronym — have been around since around the time of the last financial collapse, the burst of the Internet
bubble in 2002. A director in the National Science Foundation coined the term to describe educational programs the
federal agency was starting in school districts around the country. “It was clear to us that the United States had
to shift its educational focus to the sciences,” said Judith Ramaley, now a professor at Portland State University.
“We were planting the seed of what’s happening in New York now.” As Ramaley and her colleagues promoted STEM
programs in individual schools in districts across the country — including New York City — the idea caught on.
“Somewhere around 2008 it really exploded,” said Ramaley. “It seemed like every district in the country was starting to go
after STEM.” Leaders in education came to believe that in order to prepare students for the workforce,
they needed to ramp up training in computers, engineering and the sciences. “They were following
the jobs,” said Ray Mellado, CEO of Great Minds in STEM, a national STEM advocacy group based in Los Angeles. “If
we were going to be competitive in a global economy, we had to create a better
workforce.” U.S. Department of Commerce statistics show that STEM-related fields such as computer
programming and health care are growing at nearly twice the rate of other fields. STEM fields are
forecast to produce millions of jobs over the next decade — and those jobs pay about 25% better
than other fields, according to the Commerce Department. The shortage of workers with STEM
skills is so acute that the U.S. House of Representatives passed the STEM Jobs Act last week to make a special
allowance for 55,000 green cards for foreign-born workers who hold degrees in STEM fields. City school officials say they
want to be sure those opportunities are available to city kids, too, and made that a focus of their investment in schools.
Since 2004, the city has opened nearly two dozen technical education high schools — with seven more planned for next
year — and implemented STEM programs in hundreds of schools of all levels. “STEM schools are about
making sure our students are fully ready for the knowledge economy,” said schools Chancellor
Dennis Walcott. “They prepare students for success in college and careers.” The Bloomberg
administration has also made a $100 million investment in another huge project to prepare the STEM workforce - Cornell
NYC Tech, Cornell University’s soon-to-be-built Roosevelt Island campus that Mayor Bloomberg calls a “game-changer”
for the city’s engineering and tech industries. The $2 billion, 2 million-square-foot campus will be the city’s first worldclass university that’s exclusively dedicated to high tech. It is expected to open in 2017. Economic officials believe the
payoff will be huge: The school will generate $23 billion in economic activity, according to estimates. “As Mayor (Ed) Koch
said, ‘New York City is where the future comes to audition,’” Mayor Bloomberg said. “We’ve always been home to big ideas
and important innovations. If we want to compete in the global economy, we have to make sure it
stays that way. Educating the tech leaders of tomorrow in our city — and keeping them here — will
ensure that we can create the jobs of the future and build our economy for the long-term.”
STEM key to US economic competitiveness
Engler 13 – (John, “STEM Education Is The Key To The US’s Economic Future”, US News, 6/15,
http://www.usnews.com/opinion/articles/2012/06/15/stem-education-is-the-key-to-the-uss-economicfuture?page=2)//mm
large
numbers of jobs are going unfilled. Many of these jobs have one thing in common–the
need for an educational background in science, technology, engineering, and
mathematics.¶ Increasingly, one of our richest sources of employment and economic
growth will be jobs that require skills in these areas, collectively known as STEM. The
A close look at American unemployment statistics reveals a contradiction: Even with unemployment at historically high levels,
question is: Will we be able to educate enough young Americans to fill them? ¶ Yes, the unemployment numbers have been full of bad news
for the past few years. But there has been good news too. While the overall unemployment rate has slowly come down to May's still-high 8.2
percent, for those in STEM occupations the story is very different. ¶ [Check out the U.S. News STEM blog.]¶ According to a recently released
study from Change the Equation, an organization that supports STEM education, there are 3.6 unemployed workers for every job in the
United States. That compares with only one unemployed STEM worker for two unfilled STEM jobs throughout the country. Many
jobs
are going unfilled simply for lack of people with the right skill sets. Even with more than 13 million
Americans unemployed, the manufacturing sector cannot find people with the skills to take nearly 600,000 unfilled jobs, according to a
study last fall by the Manufacturing Institute and Deloitte. ¶ The hardest jobs to fill were skilled positions,
including well-compensated blue collar jobs like machinists, operators, and technicians, as well as engineering technologists and sciences.¶
As Raytheon Chairman and CEO William Swanson said at a Massachusetts' STEM Summit last fall , "Too many students and adults are
training for jobs in which labor surpluses exist and demand is low, while high-demand jobs, particularly those in STEM fields, go unfilled."¶
STEM-related skills are not just a source of jobs, they are a source of jobs that pay very well. A report last October from the Georgetown
University Center on Education and the Workforce found that 65 percent of those with Bachelors' degrees in STEM fields earn more than
Master's degrees in non-STEM occupations. In fact, 47 percent of Bachelor's degrees in STEM occupations earn more than PhDs in nonSTEM occupations.¶ [Read the U.S. News Debate: Should Foreign STEM Graduates Get Green Cards?]¶ But despite the lucrative potential,
many young people are reluctant to enter into fields that require a background in science, technology, engineering, or mathematics. In a
recent study by the Lemselson-MIT Invention Index, which gauges innovation aptitude among young adults, 60 percent of young adults
(ages 16 to 25) named at least one factor that prevented them from pursuing further education or work in the STEM fields. Thirty-four
percent said they don't know much about the fields, a third said they were too challenging, and 28 percent said they were not well-prepared
at school to seek further education in these areas.¶ This is a problem—for young people and for our country. We
need STEMrelated talent to compete globally, and we will need even more in the future. It is not a
matter of choice: For the United States to remain the global innovation leader, we must
make the most of all of the potential STEM talent this country has to offer.¶ Government
can play a critical part. President Barack Obama's goal of 100,000 additional science, technology, engineering, and math
teachers is laudable. The president's STEM campaign leverages mostly private-sector funding. Called Educate to Innovate, it has spawned
Change the Equation, whose study was cited above. A nongovernmental organization, Change the Equation was set up by more than 100
CEOs, with the cooperation of state governments and educational organizations and foundations to align corporate efforts in STEM
education.¶ [Check out our editorial cartoons on President Obama.]¶ Meanwhile, from June 27 to 29, U.S. News will draw together, for the
first time, hundreds of business executives, educators, policymakers, government officials, technology experts, philanthropists, community
leaders, and association chiefs to develop solutions to the jobs crisis in the STEM fields.¶ This public-private cooperation is an example of
business's recognition of the importance of STEM to our economic future.
Business needs a talent pipeline
providing the skilled employees who can routinely use scientific and technological skills
in their jobs. Fortunately, more and more companies and their senior executives
recognize this and are putting their money where their long-term interests are.¶ For
America, improving achievement in science, technology, engineering, and math will go a
long way to ensuring that our country can compete globally, create jobs, and achieve the
levels of economic growth that will buttress Americans' standard of living and social
safety net. High-quality STEM education represents an opportunity that students,
workers, educators, and business must seize if we are to keep the country strong.
Hegemony Impact
STEM education is key to heg
Bartlet 04
Member, Subcommittee on Space and Aeronautics, Committee on Science, U.S. House of Representatives, (4/1/2004, Roscoe G. Bartlett,
“LUNAR SCIENCE AND RESOURCES: FUTURE OPTIONS,” HEARING BEFORE THE SUBCOMMITTEE ON SPACE AND
AERONAUTICS COMMITTEE ON SCIENCE HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS,
http://www.gpo.gov/fdsys/pkg/CHRG-108hhrg92757/pdf/CHRG-108hhrg92757.pdf)
Mr. BARTLETT. Thank you very much. I look forward to this hearing. I have never shied away from the President’s commitment to return humans to the Moon
our country desperately needs
something that captures the imagination of our people, and inspires our young people to
go into careers of math, science, and engineering. Maybe this will do that. When we made that
commitment to put a man on the Moon, that really did that. We now have our best and
brightest students in this country going into careers other than science, math and
engineering. As a matter of fact, far too many of them are going into destructive pursuits. They are becoming lawyers and political scientists. Though we
need a few of each of those, and we have got more than a few of each of those. For the short-term, our economic superiority is at
risk if we don’t turn out more scientists, mathematicians, and engineers, and for the
longer-term, our national security is at risk. We will not continue to have the world’s best
military unless we turn out scientists, mathematicians and engineers, well-trained, and
in adequate numbers. And hopefully returning then to the Moon and on to Mars will provide the stimulus that encourages our young people to
and on to Mars. In addition to the benefits that our society will get from pushing the envelope to do that,
move into these careers that keep us the premiere economic nation in the world and the premier military nation in the world. So I think that this is an investment
that will pay very well for our society. That is why I look forward to this hearing, and thank you all very much.
AFF - General
Obama Won’t Use PC
Obama not investing political capital on anything right now
Parnes 13
Amie, The Hill, Obama is faulted on leadership, http://thehill.com/homenews/administration/309731-obama-is-faultedon-leadership, MJ
Supporters and critics of President Obama are looking for leadership on many pressing
issues from the White House, but many believe they are not getting it.¶ On Monday, Obama held a Cabinet meeting
and spoke about his effort to modernize government databases.¶ He avoided
public remarks on
several matters seen as more pressing, such as turmoil in Egypt and the wider Middle East, faltering
efforts to reform immigration in the U.S. and the rocky implementation of ObamaCare. Instead the president
spoke to a small group of reporters about his efforts to improve databases and make
government more efficient.¶ “We’re working to make huge swaths of your government more transparent
and more accountable than ever before,” Obama said at the White House.¶ Even to the most loyal Obama
supporters, the move seemed irrelevant, even odd.¶ One top Democratic
strategist griped on Monday that a White House in need of a second-term win
“isn’t using all the tools they have available to them in their toolbox.”¶ “The
president needs to be consistent about what he cares about,” the strategist said. “The only things he should be talking
about are things on his priority list and nothing else.Ӧ Republicans said the administration
appeared rudderless, while Democrats said Obama needed to be more
proactive instead of reactive.¶ “If I were to guess, I would venture to say that some people would like to
see him speak up on these issues a little more than he’s doing,” said a former administration official. “I think some people
want to see more, not less, of him.”
Obama won’t push anything
Parnes 13
Amie, The Hill, Obama is faulted on leadership, http://thehill.com/homenews/administration/309731-obama-is-faultedon-leadership, MJ
The comments on Monday were Obama’s first on U.S. soil since he returned last Tuesday from an eight-day trip to
Africa. ¶ He has yet to explain how he wants to shoehorn immigration through the GOP-
controlled House. And he has yet to speak directly to the American people about
the situation in Egypt.¶ He
has also not addressed the decision last week to delay by one year the
implementation of the employer insurance mandate, a key part of the healthcare reform law. ¶ And
Republicans claim he’s checked out of some issues altogether, including the decision on how to
broker a deal to turn back a doubling of interest rates on student loans. ¶ While Obama campaigned
rigorously on the issue last year before his reelection, Republicans say they haven’t heard a peep from him lately.¶ “There’s
no doubt this administration is being mismanaged, but there’s an amazing lack of urgency being shown,”
said Brendan Buck, a spokesman for Speaker John Boehner (R-Ohio). “Senate Democrats drove right through the
deadline on student loan rates, and we didn’t hear a peep from the president. I guess the issue’s not as important to them
when Democrats are the ones standing in the way.”
PC Not Key
Political capital not key – Obama’s involvement dooms passage
Klein 7/10
Ezra, Obama’s big problem is Obama, http://www.bloomberg.com/news/2013-07-10/obama-s-big-problem-isobama.html, MJ
For the White House, immigration reform perfectly encapsulates the most
frustrating reality of President Barack Obama’s second term: If it’s to be a success,
Obama needs to stay out of the lawmaking process.¶ That’s the message he’s
gotten from Democratic and Republican legislators alike. In the New Yorker,
Democratic Senator Robert Menendez of New Jersey recounted a White House meeting at which he told Obama how
Republicans would respond to public appeals on immigration. “Right now, if you put out your bill, they will
feel like they’re being cornered,” he said.¶ Obama wasn’t happy, Menendez recalled. “He basically said,
‘After you guys pushed me so hard in not so subtle tones, being critical at times about lacking leadership, now you’re
asking me to hold off?’ And so we took the browbeating for a little while and then I went back and said, ‘I understand why
you’re upset and how you might feel this way.’”¶ That’s Obama’s second term in one quote. In a matter of months, he
went from stomping the Republican Party in the election to being told by a
key ally that he would have to stay in the background if he wants his top priority to
succeed. The worst part for White House staff is that Menendez is right -- and they know it.
PC theory flawed - Obama is inevitably polarizing
Klein 7/10
Ezra, Obama’s big problem is Obama, http://www.bloomberg.com/news/2013-07-10/obama-s-big-problem-isobama.html, MJ
As the effective leader of one of two political parties, the
president is inevitably a polarizing figure. And
Obama himself is a special case. Last year, a Gallup Inc. poll found a difference of 76 percentage points in how
Republicans and Democrats assessed his administration. That tied the gap measured in the fourth year of George W. Bush’s term as the
most polarizing on record.¶ Frances Lee, a political scientist at the University of Maryland, has studied the effect of presidential polarization
on the U.S. Congress. In her book “Beyond Ideology,” she shows that when
the president announces his
position on an issue -- even an uncontroversial one -- it increases the
likelihood of a party-line vote.¶ “Whatever people think about raw policy
issues, they’re aware that presidential successes will help the president’s
party and hurt the opposing party,” Lee told me. “It’s not to say they’re entirely cynical, but the fact that success
is useful to the president’s party is going to have an effect on how members respond.” ¶ That effect is not, from the president’s perspective,
all bad. It makes it easier for him to corral members of his own party, as Obama discovered from 2009 to 2010, when Democrats controlled
the House and Senate and passed the stimulus, health-care reform, Dodd-Frank financial regulations and much more. ¶ Today’s
intense polarization means that any bill associated with Obama is
automatically targeted for defeat by Republicans. So in Obama’s second term, in which Democrats
have no real shot of recapturing control of Congress, the single biggest impediment to Obama’s
agenda might be ... Obama. Jonathan Favreau, who in February stepped down as Obama’s chief speechwriter, said
that dealing with the Republican Party’s reflexive opposition is a pervasive reality in the White House. “People take a very realistic approach
to it,” he said. “They’re not frustrated or upset. It’s more, ‘This is just the way things are and this is how we’ll deal with it.’ The strategy
the best chance to get something passed?’”¶ That process begins
with taking Congress’s temperature. “If it looks like there’s a path to
something passing, then, as in immigration reform, he’s got to step back,”
always comes to ‘What gives us
Favreau said. That doesn’t mean Obama has to keep mum. But he does have to keep himself out of the headlines. “All of our immigration
speeches have been very toned down,” noted Favreau.
Obama has no leverage – he can’t influence this Congress
Klein 7/10
Ezra, Obama’s big problem is Obama, http://www.bloomberg.com/news/2013-07-10/obama-s-big-problem-isobama.html, MJ
Yet the background strategy hardly guarantees success. In fact, in most cases, failure
is probable, which simply underscores that in a highly polarized era, divided
government makes big, new laws unlikely.¶ It hasn’t always been that way.
Historically, divided government has achieved as much as unified government. But the
current era defies that trend. The 112th Congress -- which served from January 2011
to January 2013 -- passed 220 laws, making it the least productive Congress on
record. So far, this Congress is on track to be even less productive.¶
Congress appears to be growing comfortable with its paralysis. Last week,
legislators couldn’t manage a relatively simple legislative fix to stop interest rates on
student loans from doubling -- an outcome that both parties had publicly sworn to
prevent. In lieu of action, the rates doubled July 8. Congress didn’t bother showing
up for work. And Obama knew full well there was nothing he could do to
force them to compromise.
Winners Win Uniqueness
Obama has had no victories – he needs one
Parnes 13
Amie, The Hill, Obama is faulted on leadership, http://thehill.com/homenews/administration/309731-obama-is-faultedon-leadership, MJ
From a strategy perspective, Matt Mackowiak, a Republican strategist, said the White House needs to be
more aggressive in plugging the holes on stories.¶ “It seems to me that they’ve got to find a way to put some of
these stories away and I don’t think they’ve done that yet,” Mackowiak said. “But my sense is that you aren’t proactive
when you don’t have good answers for the public.”¶ Obama set lofty goals for his second term
during his State of the Union address in January, but
some of his proposals have been
sidetracked by unforeseen events or have fallen flat altogether. He hasn’t achieved a
major legislative victory and has been distracted by a string of controversies ranging from the Internal
Revenue Service to the Edward Snowden affair.
AFF - Student Loans
Won’t Pass
Won’t pass – disagreement between House & Senate and along party lines
Walsh & Barrett 7/8
Deirdre & Ted, CNN, Student loan fight heats up as Congress returns from break,
http://www.cnn.com/2013/07/08/politics/student-loans/index.html, MJ
A bipartisan group of senators introduced a compromise bill at the end of June
that was close to the House passed bill, but Senate Democratic leaders have
not embraced it because it doesn't include a cap for interest rates in the event that economic conditions change
and interest rates spike.¶ Democratic Sen. Tom Harkin, who chairs the Senate panel on education, opposed that
framework, and has been pushing a proposal to simply extend the 3.4% subsidized rate
for student loans for another year.¶ The Senate is expected to vote on Wednesday whether to begin
debate on a one-year extension of the 3.4% rate.¶ But Republicans, possibly backed by some Democrats, are
expected to block that measure as they push for a broader fix.¶ As much as
leaders on both sides of the aisle are ratcheting up their rhetoric and
attempting to pin the blame for the interest rate hike on each other, the
differences between the major proposals on student loan interest rates are not significant.¶ But it's unclear whether
there will be any real effort to bridge those differences before the next
congressional recess in August, when members will go home for a month and likely hear more
frustrations from students about the inability of Congress to reach a deal.¶
No deal – even Democrats can’t agree
Lesniewski 7/18
Niels, Student loan deal waits for amendment votes, http://blogs.rollcall.com/wgdb/student-loans-deal-waits-foramendment-votes/
The Senate’s bipartisan student loan compromise remains on track for passage, but movement
will wait for next week, along with votes on alternatives that seem certain to
fail.¶ Sen. Elizabeth Warren, D-Mass., expressed frustration with the compromise that’s now
expected to hit the Senate floor next week, noting prior proposals offered by Democrats
wouldn’t have raised interest rates.¶ “All three proposals had two features in common: They cut costs
for students, and they gave us some short-term breathing room to take on bigger problems, including how to refinance $1
trillion in outstanding student loan debt and how to reduce the overall costs of college for all of our students. When we
brought the last two proposals to a vote, they won by a majority, but they didn’t pass because the
Republicans filibustered both bills,” Warren said. “We could have kept rates low, but the Republicans,
every single one of them, voted to block that.Ӧ Majority Whip Richard J. Durbin came to the floor right after Warren and
gave a peek at the way forward, which could include votes on amendments offered by Sens. Jack Reed, D-R.I., and
Bernard Sanders, I-Vt. Neither of those would have enough support for adoption, and the Senate would then move to the
compromise bill.¶ “Paying for college is tough and this legislation, I think, unfortunately
could make it tougher because it would put in a permanent structure for setting student loan interest rates
that could quickly result in students and parents paying more for student loans,” Reed said in announcing
his opposition to the compromise worked out by a bipartisan group of senators.¶ “This is not a
temporary fix to get us to a better place in terms of incentives for tuition, in terms of refinancing, in terms of letting
students more actively and more affordably pursue college education.Ӧ A few Democratic caucus
members opposed the idea of a stopgap patch, however.¶ Durbin, an Illinois Democrat,
said that he had recently spoken to President Barack Obama and that he knew the president planned to put forward a
proposal dealing more broadly with college education costs.¶ Meetings to work out the bipartisan plan, which Durbin
supports, took place in his leadership office on the third floor of the Capitol. He pushed his colleagues to take a realistic
view and ultimately let the deal go forward.
Won’t pass – Key Democrats oppose in Senate and interest groups are
mobilizing
Condon 7/19
Stephanie, Student loan deal meets resistance from the left, http://www.cbsnews.com/8301-250_162-57594464/studentloan-deal-meets-resistance-from-the-left/?pageNum=2
Sen. Tom Harkin, D-Iowa -- a key player in the negotiations -- expressed his dissatisfaction with the measure but
suggested there were few other options left. The Senate could change student loan rates again later, he said.¶ Sen. Jack
Reed, D-R.I., however, said he's opposing the bill.¶ "The clear impact of the legislation that is being
proposed is that it will increase the cost of education for students," he said on the Senate
floor. "We need to ensure our students have an opportunity to earn a degree without mortgaging their future."¶ Another
key Democrat -- Sen. Elizabeth Warren, D-Mass., has yet to say whether she'll support the
effort. Progressives have largely fallen behind a bill that Warren introduced to reduce student loan interest rates to
0.75 percent, the same level big banks receive from the Federal Reserve.¶ She and other Democrats have
railed against more conservative plans, which use the money earned from the interest rates to fill
government coffers. According to the Congressional Budget Office, the U.S. will pocket a record $51 billion in profits this
year off new and current federal student loans. On Wednesday, Warren called those profits "morally wrong" and
"obscene."¶ With the Senate set to vote on the new compromise early next week, activist
groups are mobilizing opposition. Democracy for America is asking its 1 million supporters to share its
loan calculator, which shows much interest a student would have to pay under the new plan, compared with what they
would pay under other proposals.¶ Democracy for America and other groups like
MoveOn.org and PCCC have also been organizing support for Warren's
legislation. More than 600,000 people have signed a petition in support of the
measure, while more than 13,000 have called their senators about it. PCCC, meanwhile, as
rounded up more than 1,200 university professors to come out in support of Warren's bill.
Won’t pass - Republicans don’t want quick fix and Democrats don’t want
market rates
Davis 7/9 (Susan, USA Today, “Senate poised to fail -- again -- on a student loan fix”,
http://www.usatoday.com/story/news/politics/2013/07/09/senate-student-loan-rates-double-july-gop/2502339/,
7/9/2013)//SLR
The Senate will vote Wednesday on a Democratic plan to scale back federally subsidized student loan rates, which
doubled on July 1, but the proposal lacks enough support required to pass, leaving
a
divided Congress no closer to compromise. The Democratic proposal would extend
for one year the previous 3.4% rate, which has doubled to 6.8%, and pay for
it by closing a tax loophole that benefits the wealthy. Supporters say the short-term
patch would provide Congress more time to revamp the student loan system during reauthorization of the Higher
Education Act next year. "Let's extend this for a year," said Sen. Al Franken, D-Minn. "This will put more pressure on us
to do the reauthorization, to get it done." However, a similar effort last month by Senate
Democrats to extend the lower rates for two years failed to meet the 60-vote
threshold required for a vote because Republicans oppose a short-term fix.
"Why in the world the Senate would leave 7 million middle-income families twisting in the wind when we have a chance
for a permanent solution, I cannot imagine," said Sen. Lamar Alexander, R-Tenn. A coalition of Senate Republicans and
two Democrats, Sen. Joe Manchin, D-W.Va., and Sen. Tom Carper, D-Del., along with Sen. Angus King, I-Maine, have
offered a competing proposal to tie interest rates to the financial markets and
remove Congress' role in determining loan rates. They have asked Senate Majority Leader
Harry Reid, D-Nev., for a vote on the proposal. It is a similar plan to a House GOP-passed bill, but there is strong
opposition to it among liberal Democrats, although the proposal is based on a policy endorsed in
President Obama's budget.
Won’t pass – Senate delaying vote
Downey 7/18
Maureen, Compromise ends student loan stalemate. Is it the best solution?, http://www.ajc.com/weblogs/getschooled/2013/jul/18/compromise-ends-student-loan-stalemate-it-best-sol/
A bipartisan Senate deal to cancel the doubling of a popular student loan
rate by pegging the interest to market fluctuations will have to wait until next
week for a vote, while Democratic leaders placate dissenters within their ranks.¶ The
agreement announced yesterday by Republican and Democratic negotiators after weeks of talks aims to break the
legislative logjam that prevented Congress from acting to avert the July 1 doubling of the Stafford subsidized loan rate
from 3.4 percent to 6.8 percent.¶ The accord backed by the Obama administration would lower rates for all 11 million
undergraduate Stafford borrowers in the coming academic year. Congress faces a looming deadline
on the issue -- it must pass legislation before lawmakers leave Washington
for a five-week recess after Aug. 2 to ensure that students who begin borrowing next month aren’t hit
by the higher rates.¶ The Republican-backed market-based approach had been opposed by many Democratic senators.
Still, the Democrats faced enormous pressure to resolve an issue that has such a pocket-book impact on so many voters.¶
The deal was spurred by last-minute presidential arm-twisting and probably has majority support in the chamber. The
Senate’s Democratic leaders, though, decided to delay an immediate vote on the
measure to allow some of their colleagues time to make their case for an
alternative approach.
Obama Not Pushing
Obama not pushing student loans
Davis 7/9 (Susan, USA Today, “Senate poised to fail -- again -- on a student loan fix”,
http://www.usatoday.com/story/news/politics/2013/07/09/senate-student-loan-rates-double-july-gop/2502339/,
7/9/2013)//SLR
The White House has taken a less aggressive role in this legislative dispute
compared with the same battle last summer during President Obama's reelection race, when he campaigned on the issue and Congress extended the
3.4% rate for an additional year. "The differences are not that significant," White
House spokesman Jay Carney said Monday, calling on Congress to "fix this problem
quickly." House Speaker John Boehner, R-Ohio, accused Senate Democrats of seeking
political advantages in the standoff.
No Impact
The economic impact of the rate hike is overstated – it’s minimal
Stromberg 6/5
Stephen, “The Realities of the student loan rates”, July 5, 2013,
http://www.philly.com/philly/opinion/20130705_The_realities_of_student-loan_rates.html, LK
Student-loan rates doubled on Monday. This is not a disaster, despite what
you've heard. President Obama made the expiration of a 3.4 percent student-loan rate a big campaign issue last
year, warning of dire financial consequences for struggling students. Congress extended the rate for a year. Now that
extension has expired, and each side is bashing the other for allowing that 3.4 percent rate to adjust upward (though
Republicans are yelling the loudest). "The divisions among the president and his own party," House Speaker John
Boehner proclaimed on Monday, "are directly responsible for the current impasse that will now result in higher borrowing
costs for students already coping with skyrocketing tuition bills." But there's a lot the politicians are leaving out. First,
the rate in question is not on all federal student loans, but on one class of
them: subsidized Stafford loans. Second, the government isn't hiking the rate
on any existing loans - only on new ones. Any loans issued before Monday keep the rate they
originally came with. Third, even at 6.8 percent, students are getting a great deal. They
are risky borrowers, and no private lender would front them money at
anything like the rates the government is offering - not to mention the terms. Oh,
yes, the terms. The interest rate is only one thing that determines how much
student borrowers end up paying after graduation. Much more important are the
repayment options the government extends to needy debtors. Under an income-based repayment
program Obama championed, student borrowers are never required to pay
more than 10 percent of their disposable income in debt service. And the
government will forgive any remaining loan balance after 20 years, as long as
those borrowers qualify.
No impact – the rate increase doesn’t happen until this year’s borrowers
leave school, amounts to only $17 more per month and won’t impact
enrollments
Johnson 7/10
Jenna, Senate student loan interest rate bill fails on procedural vote, http://www.washingtonpost.com/blogs/postpolitics/wp/2013/07/10/senate-student-loan-interest-rate-bill-fails-on-procedural-vote/, MJ
For the past several years, the federal government has slowly lowered the interest rate for new subsidized Stafford loans,
which are available to students with financial need and taken out by millions of undergraduates each year. For the past
two years, the rate has been 3.4 percent. That rate expired July 1, bouncing it back to 6.8 percent. Interest rates on other
education loans offered by the government, which make up the bulk of loan disbursements each year, have rates of 6.8 and
7.9 percent. Right now, interest rates of all sorts are at low levels, making these
fixed rates seem high for a government loan.¶ The doubling of the interest rate will impact the more
than 7 million undergraduates who are expected to take out one of these loans for the coming school
year. When they finish or leave school, many could see a loan bill that’s $17 to
$24 higher per month. While this is an added burden for low-income
students, higher education leaders do not expect it to dramatically impact
enrollments.
Passage Doesn’t Solve Econ
Passage doesn’t solve for the economy – the compromise bill only delays the
impact
David-Gaines 7/19
Wendy, Student loan deal is double edged sword, http://www.examiner.com/article/student-loan-deal-a-double-edgedsword
Under the compromise bill, both subsidized and unsubsidized Stafford Loans would have the same
interest rate. The financial aid benefit of receiving a subsidized loan at a discount rate would be lost.¶ The
new rate
varies from year to year making it harder to calculate total college costs.
There is general agreement on one thing. The cost of borrowing will be
higher. Interest rates will rise as the economy improves.¶ Placing a greater
financial burden on students hinders the goal of creating more highly
educated employees in a modern economy. Huge consumer debt is a road block to personal and
national prosperity. While other countries invest in education, if the current bill is not modified,
Congress will be encouraging outsourcing by making it harder for
Americans to achieve the skills necessary to compete. This will make it more difficult for
college graduates to get well-paying jobs to pay off their debt.
Turn – Lower Rates  Higher Tuition
Low rates incentivize colleges to increase tuition
Wall Street Journal 6/28
Thanks to student loans, colleges raise tuition (a lot) because they can, http://dailycaller.com/2013/06/28/glennreynolds-thanks-to-student-loans-colleges-raise-tuition-a-lot-because-they-can/
The skyrocketing cost of a college education is a classic unintended
consequence of government intervention. Colleges have responded to the
availability of easy federal money by doing what subsidized industries
generally do: Raising prices to capture the subsidy. Sold as a tool to help
students cope with rising college costs, student loans have instead been a
major contributor to the problem.¶ In truth, America’s student loan problem
won’t be solved by low interest rates—for many students, the debt would be
crippling even if the interest rate were zero.¶ If we want to solve the very real problem of
excessive student-loan debt, college costs
need to be brought under control. A 2010 study
by the Goldwater Institute identified “administrative bloat” as a leading reason for higher costs. The study found that
many American universities now have more salaried administrators than teaching faculty.