Today, our leaders seem to toe a very fine line between democratic representation and demagoguery. In a time of massive informational diffusion and a multiplicity of authorial voices, we cannot always trust — and should therefore always question — the urgency of the problems that our representatives bring to the floor. Are these hot-button issues actually relevant to public discourse, or are they a sham lit by trick candles, rekindled as quickly as they were blown out by the whim of populist concern? Some of our political debates may fall into the latter camp, but most would agree that when it comes to education policy — specifically higher-education finances — we face a growing problem that becomes all too real as our generation enters the working world.
Using her second floor speech since being elected, Senator Elizabeth Warren (D-Mass.) introduced her solution to the imminent July 1 increase in the 3.4% federal student-loan interest rate. Bringing this otherwise unheard of increase to the forefront of our minds, Warren uses a vivid image to get her point across, an image all too familiar in today’s discourse: big banks. The “Bank on Students Loan Fairness Act” claims that if the Federal Reserve can give large financial institutions the low interest rate of 0.75% then it should also be willing to give its students the same low rates.
In efforts to place “a good education within reach of all who are willing to work for it,” Warren is argued to have ignored the “facts” and “numbers” that accompany her bill. Yes, the details of federal rates and their short-term time horizon do make her analogy a bit suspect. Yes, the comparison does raise questions about the potential costs of cutting governmental return on these loans. Yes, opponents of the bill have been quick to point out these apparent flaws in her persuasive argumentation. However, one is hard-pressed to find disagreement with the crux of her proposal. When taken as a whole, Warren’s bill works to prevent the doubling of an already extended interest rate, regardless of the direct parallel to a big bank’s borrowing capabilities.
Unfortunately, it is easy to take issue with the bill on purely semantic grounds. Using the federal government’s ability to provide often-overnight loans to “low risk” entities, places students — what the market calls “high-risk” investments — in direct opposition to banks. This equation diminishes the requirements for banks to receive discount window loans, causing opponents to cringe at her naïveté. Rather than attempt to illustrate her solution with a highly contentious and arguably complicated comparison, Warren should emphasize and bolster the importance of higher education — an importance that we champion, and more importantly, that the global market requires.