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Bessent: GOP and Democrats should get together on student loan rates

The dome of the U.S. Capitol. (April 15,

The dome of the U.S. Capitol. (April 15, 2013) Photo Credit: Getty Images

A Congress that can't manage to do much of anything should avoid the need to do some things over and over again. That includes what's become an annual fight to make sure the interest rate on college student loans doesn't double.

Nobody wants that to happen, least of all the millions of students with little choice other than to pile on debt. But the rate on subsidized Stafford loans will bound from 3.4 percent to 6.8 percent July 1 unless Congress, for one brief shining moment, actually rises to the occasion. Amazingly, there's reason to believe it just might.

Instead of the usual partisan death match, congressional Republicans are backing a long-term solution very similar to one that President Barack Obama proposed earlier this year. Each proposal would tie interest on the student loans to market rates. That's a good idea.

It would keep the cost of borrowing low for the immediate future and, done right, would enable the government to continue covering its costs down the road should market rates rise. And since Congress wouldn't need to revisit the issue anytime soon, it would eliminate the nail-biting uncertainty for students.

There are key details Republicans and Democrats will have to work out. For instance, whether to peg interest on the loans to the rate at which the government borrows money or some other benchmark, and whether to cap how high the rate would be allowed to go. But that's just a numbers game.

There's no grand philosophical difference at stake, so compromise is within reach.

There hasn't been enough of that lately. Congress should give it a try.


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