Like most political discussions, the student aid debate is driven far more by sentiment than reasoned analysis. If we used the latter, we'd be demanding big aid cuts for the sake of students and taxpayers alike.

As I testified to a Senate panel earlier this week, the evidence is powerful that there is massive overconsumption of higher education, and cheap federal aid ultimately fuels the college price skyrocket while encouraging students to tackle programs and debt they often can't handle.

I won't go into all the evidence -- you can get much of it in my testimony, and even more in this report -- but here are a few of the big points that plead for us to stop the rhetoric and attack the waste:

• Aid and prices have both increased at breakneck speeds over the last several decades. Growing empirical research shows that this is not an accident -- colleges raise their prices to capture the aid -- though there is a limit to what research can prove. Fortunately, logic can fill in the rest: People who work at colleges are normal human beings and will take every dollar they can get their hands on. They always have something good -- either personally or professionally -- they think they can do with it.
• Inflation is not explained just by state and local budget cuts. Both public and private colleges have seen decades of rampant inflation; total state and local funding to colleges has not dropped during that time; and on a per-pupil basis public schools have raised tuition revenue by roughly two dollars for every dollar lost in appropriations.
•Only 57 percent of first-time, full-time students at four-year colleges finish their programs within six years. Huge numbers of the students we encourage to go to college, including with federal grants and loans, languish there and likely never finish.
•Roughly one-third of people with bachelor's degrees are in jobs that don't require them.
•Most of the jobs expected to have the biggest growth in the coming decades will not require college attendance, but on-the-job training.

The list could go on, but the point is unmistakable: Talk all you want about the power of education, or the future economy, the public dollars we lavish on higher education -- including federal student loans with generous terms and interest rates -- are largely being squandered, even if with good intentions. Add all this to the nation's staggering debt, and it is well past time to that we stop all the talk and start dealing with reality.

It is hard to think of a more ill-advised policy choice than allowing the interest rate on federal student loans to double for the sake of a one-year reduction in the federal deficit. Why would this be such a bad idea? Let me count the ways.

1. At a time when American employers are decrying the dearth of college-educated workers, making it more expensive to go to college would seem to be the last thing we want to do. Our success as a nation in increasing the number of college graduates we produce depends on getting on the college pathway students who are not already there, especially those from low-income and minority families. Doubling student loan interest rates would have just the opposite effect, not only making it objectively more difficult for lower-income students to go to college, but discouraging many from even aspiring to post-secondary education.
2. Students who are not discouraged by the specter of higher debt, and borrow what they need to attend and complete college, will be rewarded, if interest rates are allowed to double, by being saddled with even more debt than college graduates are already carrying. “The outstanding student loan balance now stands at about $870 billion,” reported the New York Federal Reserve Board earlier this month, “surpassing the total credit card balance ($693 billion) and the total auto loan balance ($730 billion).” Such a high level of debt burdens graduates for a decade and more after graduation, interfering with financial decisions like home-buying that belong to that time of life. It also skews career choices away from such badly needed professions as teaching and social work. Is it really in our interest to burden our children with even more debt?
3. Student debt threatens not only our need for college graduates and the financial health of those who are forced to pay more for their college education but the broader economy as well. Student debt, says the president of the National Association of Consumer Bankruptcy Attorneys, “could very well be the next debt bomb for the U.S. economy,” following on the mortgage loan crisis. Is this a risk we want to heighten by increasing interest rates?

Adequate funding for education must be an investment decision, investing in education from pre-school through college to realize the return of the contribution that a college-educated workforce can make to the economy. This is no time to disinvest in education—which is what higher student loan interest rates would amount to—for the sake of short term savings.

Let us not, however, as we focus on the public responsibility in making college education affordable overlook private responsibility: parents’ responsibility to save for their children’s education from their earliest years. Even the best need-based scholarships often don’t cover the complete cost of education. And even if student loan interest rates are maintained at current levels, borrowing leads to debt. Even modest monthly deposits over the course of many years will build a healthy college account, and reduce the amount that has to be borrowed.

Moreover, by involving families in planning for college from their children’s early years, and by giving them a tangible stake in their education—by giving them some skin in the game— saving for college makes college attendance more likely: four times more likely for students whose parents save, seven times more likely when the account is in the student’s name. UNCF is completing a project, the Partnership for College Completion, undertaken in collaboration with the KIPP charter school network and CFED (Corporation for Enterprise Development) and funded by the Citi Foundation and Citibank, that combines strong pre-college academic preparation and college scholarships with seeded and incentivized college accounts.

If you’re going to charge more, give consumers more for their money

Federal student and parent loans are a great value for education consumers, not just because of a low interest rate, but because of the many consumer protections and repayment options available to the borrower. A ”market rate” for a loan with these options would be far higher than both the current rate and the proposed rate. But, if the interest rate is too high, relative to other private loans with fewer options, an unintended negative consequence could very well be an uptick in private education loan volume.

As private lenders begin to offer fixed or variable rates comparable to or lower than federal offerings, many student loan consumers may choose private loans based on interest rate alone. But in doing so they’ll sacrifice all the consumer rights that come with federal education loans with regard to deferment, forbearance, income-based repayment, etc. Students and parents are often too optimistic at the start of college that “everything will work out” and they’ll be able to handle the loan repayment, but as the recent recession has proven, there’s never been a worse time for borrowers to be lured into giving up these consumer protections in the federal loan programs for a lower rate. If federal student loan interest rates do go up, the government needs to do a much better job of explaining to families why its loan product is superior to that of the private market, and it needs to do a much better job of helping struggling borrowers take advantage of the program’s many safety features after graduation. American consumers aren’t stupid and they understand the old adage “you get what you pay for” – but they need to be shown that they are in fact getting a better-value and service in return for higher interest and fees.

Last week in my hometown of Boulder, University of Colorado students protested tuition rates that are expected to increase 8.5 percent on top of a nearly 10 percent increase just last year. We’re seeing much the same on campuses across America. If we keep pricing students out of a higher education we’re going to put college out of reach for too many talented young people and undermine our nation’s long-term economic competitiveness.

What is Congress doing to keep the dream of a college education alive by making it more affordable for students and families? Nothing. In fact, continued inaction will likely drive up costs for recent graduates and pile additional debt on the backs of new students.

To date, Congress has failed to act on legislation that would retain the 3.4 percent student loan rate that Democrats set five years ago to alleviate the debt burden of recent graduates. Nearly 7.5 million low- and middle-income student loan recipients applying for new subsidized Stafford loans could face as much as $5,000 in higher loan repayment costs if the rate is allowed to double to 6.8 percent.

We’ve seen much the same when it comes to Pell Grants, which are the foundation of college financial aid for students from low-income families. Congress has already restricted how long students can quality for these grants, eliminated grants for students taking summer classes, and required students to be enrolled at least half-time. These actions make receiving a diploma more difficult, particularly for non-traditional students, those who attend community colleges or work while gaining credit toward their degree, and for high school students who take college-level classes to get a jump start on their higher education.

Increasing college affordability should be a bipartisan goal that we can all embrace. President Obama has already proposed an ambitious and fiscally responsible plan that would expand student financial aid while encouraging colleges and universities to hold down tuition. He also is looking at linking federal campus-based aid to better outcomes in terms of lower tuition, serving more low-income students, and improved student results.

We must also recognize that we need better data about employment, earnings, and outcomes for returning and transferring students. With the reauthorization of the federal Higher Education Opportunities Act pending in the next Congress, it is essential that we look at how to fairly shape these issues in a policy framework.

The simple fact of the matter is a two- or four-year college degree is increasingly a minimum job requirement and a highly educated workforce is more and more a determining factor for global economic competitiveness. Students must find aid sufficient to make their college dreams real while schools are held accountable for the cost and quality of the degrees they provide. That’s the kind of investment and accountability that will keep college within reach of families and keep America on top of the world economy.

Five years ago, in a maneuver that some of us regarded as a troubling move for a federal government swimming in red ink, Congress decided to temporarily supersize the subsidy on student loans. Knowing how advocacy groups tend to regard any largesse as a permanent entitlement, no matter how temporary it's supposed to be, the risk was that taxpayers were being tapped to induce students to borrow more-- only to have PIRG later complain that their loan burdens were too big and the reset rates were too high. Shockingly, this has come to pass. Wow, hard to see that one coming, right?

Just three thoughts really:

1] The federal government is slated to borrow more than a trillion dollars this year. It needs to cut spending and raise taxes, and is in no place to be cooking up new commitments.

2] The outcry is about an increase of $2,800 in the amount being paid to Uncle Sam in the course of a 10-year repayment. That's about $280 a year, or less than $25 a month. Taxpayers should feel just fine asking students who accepted subsidized loans to pony up that $6 a week (which is precisely what the student committed to when taking the loan).

3] We really need to stop suggesting that it's okay renege on obligations when we decide we no longer like the terms of contracts we voluntarily signed. It's been a meme the last few years, especially with Occupy Wall Street, and it makes it makes it really hard to teach students to value promises, honor their obligations, or take responsibility for the consequences of their actions.