Why affordable student loans matter

Money-filled Mason jar labeled

Sometime between now and July, lawmakers might decide against doubling the interest rate on federally subsidized student loans.

Currently at 3.4%, the rate is scheduled to increase to 6.8% this summer.

Combined with projected tuition increases, the cost of college for borrowers would increase about 20% next year unless lawmakers act, according to the Center for American Progress.

This is less an issue of intent and more a question of whether Congress can get its act together.

Democrats and Republicans mostly agree that doubling the interest rate on student loans is a bad idea, in large part because most Americans also think so and the lawmakers don't want to peeve the voters.

They just can't agree on a funding source that would replace the money the interest-rate hike would have generated.

But there's more than a political fight at stake here.

You might have heard, perhaps back in your elementary-school days, that America is a meritocracy.

Anyone can come here and make a better life for himself or herself by dint of ability, hard work and sacrifice. We don't care what color, religion or birthplace you claim. Ability is the only thing we measure.

This, of course, is nonsense.

Americans care very much about color, religion, birthplace, gender, social class and lots of other things that can muddy our response to a person's ability.

All other things being equal, it is easier to succeed here if you are a man, white, tall, Christian, heterosexual, with a lean build and born to a wealthy family than if you are a woman, dark-skinned, short, non-Christian, gay, with a rotund build, born into an impoverished family.

It's more difficult to succeed economically if you're that second person, but it's not impossible.

Federally subsidized student loans are one of the things that have made America a little bit more of a meritocracy.

These loans are not a free ride.

For that, you'll need grants and scholarships. Some of those are available strictly on the basis of financial need: Pell Grants, for instance, and some of the aid offered directly by colleges to admitted students. Pell Grants have a $5,550 annual limit.

With even in-state costs (that's tuition, room and board and fees) at public universities coming in around $22,000 a year, you'll probably need some extra help.

Many other scholarships depend on your connections.

You've got a better chance of getting a service club scholarship, for instance, if one of your parents is a member of that club. Ditto help from professional organizations, beauty pageants and so forth.

That's where student loans come in.

Because they're backed by the credit of the U.S. government, they offer below-market interest rates and are typically much less expensive than private student loans. And federally backed student loans are need-based, so you don't have to impress anybody in order to get one.

Borrowers have to pay back student loans. Not even bankruptcy can erase them.

Paying them back will be a good deal more expensive if lawmakers don't move to prevent the student loan interest rate from doubling.

If the increase goes through, over 10 years a graduate will hand over about $2,600 more to pay off loans totaling $13,000, an average amount of debt for someone who has just earned a bachelor's degree. (That person might also be paying off private student loans.)

That might not seem like a ton of money, and to some folks, maybe it's not.

But it is a ton of money to someone who is a single parent or whose family can offer no financial support.

To the least-advantaged students in the U.S., that extra money represents a barrier to entry.

It's one more thing they will have to surmount in order to get the college education that's become an all-but-mandatory credential for success in this country.

Some of them will bite the bullet. Others won't. The second group will likely have less economic security and fewer opportunities to share their potential with the rest of us.

If you're the kind of person who abhors welfare, consider that these people (as a group) are much more likely to need it.

If you're a person who likes progress, consider the ideas and innovations these people might have made in the careers that college would have made possible.

Then consider that, either way, we lose by not keeping federal student loans affordable.