A Good Idea from Tom Coburn

Over at the College Guide, Daniel Luzer has an idea, adopted by Senator Tom Coburn, to cut the Gordian Knot of student loan interest rates:

Earlier in the week Senators Tom Coburn (R-OK) and Richard Burr (R-NC) introduced the Comprehensive Student Loan Protection Act, S. 3266. The Coburn-Burr bill would set interest rates on all federal student loans to the borrowing rates on 10-year U.S. Treasury notes.

The proposal would also add three percent to the rate on 10-year treasuries, which seems a little unnecessary—why not take advantage of the market’s overwhelming desire to lend the US government money on behalf of students too?—but it’s better than the status quo. More importantly, it would fix the situation permanently. As Daniel says, “there’s no reason to have a bizarre, political debate about this issue every time the rule expires.”

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Ryan Cooper

Ryan Cooper is national correspondent for the Week, and a former web editor for the Washington Monthly.