Rep. Luke Messer (R-IN) told MSNBC’s Luke Russet that young people should support the Republicans’ plan to tie student loan interest rates to market rates because “I think personal responsibility is pretty cool.”
Messer came on to discuss competing proposals from Democrats and Republicans, both of which seek to avert an automatic student loan interest rate doubling on July 1, when the rate is expected to double from 3.4 percent to 6.8 percent. Both plans aim to peg rates to the 10-year Treasury note rate, but the Republicans’ proposal adds a surcharge of 2.5 percent for federally subsidized student loans. The president’s proposal also pegs the rate to Treasury lending rates, but adds only 0.93 percent for subsidized Stafford loans, 2.93 percent for unsubsidized Stafford loans, and 3.93 percent for PLUS loans for parents and graduate students.
“When it looks like the Republicans are on the side of letting rates go up to 8.5 percent and the president wants to keep them lower in 3 to 4 [percent] range, that is problematic for you guys, is it not?” Russert asked.
“Republicans have to do a better job of explaining how our ideas apply to young people. Sometimes it sounds like he is selling ice cream and we’re selling spinach. I think personal responsibility is pretty cool,” Messer replied. “There is nothing out of date about freedom, and we have the policies that get this budget back in line, stop the explosive growth of spending. Spending that will be paid for by this generation. We’ve got to do a better job of explaining that.”
“Elizabeth Warren has an idea which said, look, big banks pay an interest rate of 0.75 percent,” Russert countered. “Why not give students the same rate as big banks? What is the problem with that?”
“The problem is that it gets back in the business of government setting rates and kind of having the rates set by the next mud wrestling match. Now I agree we probably give big banks too good of a deal,” Messer admitted. “But I think the best way to do that is let markets determine what the appropriate risk is for students.”
Watch the interview, broadcast on MSNBC on May 31.