In a new piece at Accuracy in Academia, Roger Aronoff examines the argument over student loans and determines bigger doesn’t always equal better.

Big College Soaks Taxpayers

Rates on new subsidized federal student loans just doubled from 3.4% to 6.8% on July 1st, a fact that was met with dread, frustration, and, for some, celebration. As Danielle Kurtzleben notes for U.S. News and World Report, a student loan rate of 6.8 percent “wasn’t always so scary,” that is, until Congress lowered it to 3.4%.

“The increase was long foreseen,” reported InsideHigherEd. “Congress passed legislation in 2007 that gradually lowered the interest rate from 6.8 percent to 3.4 percent over five years, but the rate was scheduled to rebound in 2012.”

“But as concern grew about student debt during last year’s presidential campaign, student groups and the Obama campaign successfully persuaded Congress to pass a one-year extension of the 3.4 percent interest rate, a historic low, at a cost of $6 billion.”

Clearly, extending this historically low rate was politically and financially untenable; but if you read the mainstream media, a Congressional “impasse” is what’s to blame for the current rate. That is coded language which means it’s the fault of those evil Republicans who refuse to pass anything meaningful. “The rise in interest rates came because Congress failed to reach a compromise last week for the student-loan program,” reported the Christian Science Monitor.

“Republicans have taken advantage of the gap between the Obama administration and congressional Democrats,” asserted The Hill. “Since the House passed its proposal, Republican leadership has engaged in some of the same campaign-style tactics used in the past by Obama to criticize Democrats’ inability to advance their own plan,” reported the Los Angeles Times.

President Obama proposed a fix in his 2014 budget which, according to InsideHigherEd, “would peg the interest rate on student loans to the yield on 10-year Treasury bonds, with lower rates for subsidized loans (the 10-year Treasury yield plus 0.93 percentage points) and higher rates for unsubsidized and PLUS loans.” The Republican House plan, in contrast, “would allow student lending rates to reset each year, based on the interest rate of a 10-year Treasury note, plus 2.5 percentage points for Stafford loans,” according to The New York Times.