A Tax By Any Other Name

Check out this quotation from a recent Chronicle of Higher Education article (Monday, April 26, 2004):
"The Republican leaders of a key education committee in the U.S. House of Representatives are planning to introduce a bill this week that includes a provision designed to diminish the appeal of a popular program that allows borrowers to combine and refinance their federal student loans."
"Under the plan, borrowers who seek such consolidation loans would no longer be able to "lock in" a fixed interest rate for up to 30 years, as they are able to do now. Instead, the borrowers would be charged the same rate as all other student-loan recipients are charged in a given year. Currently that rate varies from year to year, based on market conditions."

The effect will be that people who borrow to increase their education and thereby their productivity in the economy (there is a high correlation between education and income) will be forced to accept so called "balloon rates" on their student loans. When you take out a loan, you will have no idea what the interest will be over the life that loan.

This is clear attempt by the Republicans to raise revenue without appearing to raise taxes. I call on everyone who sees the website to write to their congressional reps to oppose this Republican attempt to subsidize tax cuts for the already rich by shifting the burden onto the would be Horatio Algers of the modern world (student loan recipients).