By George F. Will
The Washington Post
May 17, 2012
Bipartisanship, the supposed scarcity of which so distresses the high-minded,
actually is disastrously prevalent.
Since 2001, it has produced No Child Left Behind, a counterproductive federal
intrusion in primary and secondary education; the McCain-Feingold speech rationing law (the
Bipartisan Campaign Reform Act); an unfunded prescription drug
entitlement; troublemaking by Fannie Mae and Freddie Mac; government-directed
capitalism from the Export-Import Bank; crony capitalism from energy
subsidies; unseemly agriculture and transportation bills; continuous bailouts of
an unreformed Postal Service; housing subsidies; subsidies
for state and local governments; and many other bipartisan deeds, including most
Now, with Europe’s turmoil dramatizing the decadence of entitlement cultures
and with American governments — federal, state and local — buckling beneath
unsustainable entitlements, Congress is absent-mindedly creating a new
entitlement for the already privileged. Concerning the “problem” of certain federal student loans, the two parties pretend to
be at daggers drawn, skirmishing about how to “pay for” the “solution.” But a
bipartisan consensus is congealing: Certain student borrowers — and eventually
all student borrowers, because, well, why not? — should be entitled to loans at
a subsidized 3.4 percent interest rate forever.
In 2006, Democrats, trying to capture control of Congress by pandering to students and their parents, proposed cutting
in half the statutory 6.8 percent rate on some federal student loans. Holding
Congress in 2007, and with no discernible resistance from the compassionately
conservative George W. Bush administration, Democrats disguised the full-decade
cost of this — $60 billion — by pretending that the subsidy, which now costs $6
billion a year, would expire in five years.
The five years are up July 1, and of course the 3.4 percent rate will be
extended. Barack Obama supports this. So does Mitt Romney, while campaigning against a
“government-centered society.” What would we do without bipartisanship?
The low 6.8 percent rate — private loans for students cost about 12 percent —
was itself the result of a federal subsidy. And students have no collateral that
can be repossessed in case they default, which 23 percent of those receiving the
loans in question do. The maximum loan for third- and fourth-year students is
$5,500 a year. The payment difference between 3.4 percent and 6.8 percent is
less than $10 a month, so the “problem” involves less than 30 cents a day.
The 3.4 percent rate applies to only one category of federal loans, but
because the Obama administration has essentially socialized the student loan
business, federal loans are 90 percent of student borrowing, and this
“temporary” rate probably will eventually be made permanent for all federal
Unsurprisingly, Obama has used this loan issue as an occasion to talk about
himself, remembering the “mountain of debt” he and Michelle had when, armed with
four Ivy League degrees (he from Columbia, she from Princeton, both from Harvard
Law), they graduated into the American elite. The Atlantic’s Conor Friedersdorf notes that if Washington is feeling
flush enough to spend another $60 billion on education in a decade, it could
find more deserving people to subsidize than a privileged minority of college
students who are acquiring credentials strongly correlated with
higher-than-average future earnings.
The average annual income of high school graduates with no college is
$41,288; for college graduates with just a bachelor’s degree it is $71,552. So
the one-year difference ($30,264) is more than the average total indebtedness of
the two-thirds of students who borrow ($25,250).
Taxpayers, most of whom are not college graduates (the unemployment rate for
high school graduates with no college education: 7.9
percent), will pay $6 billion a year to make it slightly easier for some
fortunate students to acquire college degrees (the unemployment rate for college
graduates: 4 percent).
Between now and July, the two parties will pretend that it is a matter of
high principle how the government should pretend to “pay for” the $6 billion
while borrowing $1 trillion this year. But bipartisanship will have
been served by putting another entitlement on a path to immortality.
Campaigning recently at Bradley University in Peoria, Ill., Romney warned
students about their burden from the national debt, but when he took questions,
the first questioner had something else on her peculiar mind: “So you’re all for
like, ‘Yay, freedom,’ and all this stuff and ‘Yay, like, pursuit of happiness.’
You know what would make me happy? Free birth control.”
While awaiting that eventual entitlement, perhaps she can land a
subsidized loan so she can inexpensively continue to hone her interesting