This response is from my colleague at the New America Foundation: Jason Delisle, director of the Federal Education Budget Project.

It’s important to think about “what protections [for borrowers] would be needed,” if Congress made changes to the interest rates on federal student loans. Even so, it seems hardly anyone understands the protections borrowers already get under the current federal loan system. What else could explain President Obama and Mitt Romney’s mutual misunderstanding that charging lower interest rates on Subsidized Stafford loans helps borrowers who can’t find a job?

Subsidized Stafford loans for undergraduates – the only type eligible for the 3.4 percent interest rate – include a special interest-free benefit. The interest clock on these loans is frozen while a borrower is enrolled in school and for up to three years if a borrower is unemployed or meets the rules for economic hardship. This means that keeping the interest rate on newly-issued Subsidized Stafford loans at 3.4 percent will not affect unemployed borrowers. The interest rate for these borrowers is automatically 0.0 percent.

Borrowers working part-time or in low-paying jobs need not worry about the interest rate on Subsidized Stafford loans (for three years) either if they enroll in the income-based repayment plan. This plan caps a borrower’s monthly payment at a share of his disposable income, regardless of the interest rate on the loans. But the deal is even sweeter for Subsidized Stafford loans. If a borrower’s monthly payment is too low to cover the interest that accrues, the government forgives it – up to three years’ worth.

These protections make the rhetoric about lowering interest rates to help college graduates weather a weak job market ill-informed at best. By definition, the campaign to keep interest rates lower on Subsidized Stafford loans is about keeping rates lower only for those borrowers who are employed and earn enough to be ineligible for the income-based repayment program. It is those fully-employed borrowers who are most able to swing the extra $9 a month (at most) that another year of loans offered at a 3.4 percent interest rate would otherwise save them.

Targeting a precious $6 billion right now to borrowers who have jobs and incomes high enough to cover the higher rate seems out of touch, especially when the Pell Grant program needs approximately that much next year to stave off a massive cut to the aid it provides.

The economy is the number one political issue, and higher student loan interest rates would be an additional burden on a still-fragile economy struggling to rebound. It doesn't take the wisdom of Solomon to understand that it's a bad idea for college students to dig themselves deeper into debt.

Extending lower rates for student loans should be a no-brainer. But in this hyper-divisive political climate, even the call to spare students seeking a college education from being saddled with debt has fallen victim to partisan bickering.

Funny thing about educators, we’re good at math. Some, like me, even taught it. How do you manage $15,000 in student loans on a $30,000 beginning teacher’s salary? That’s an arithmetic problem that plenty of new teachers and current education majors are agonizing over. The result is many young people, looking at their future income-to-debt ratio, are making decisions about careers based on the reality of having to repay loans.

Raising the bar for entry into teaching is a key plank in NEA’s action plan to transform the profession. Leading the profession begins with preparation, and we are jeopardizing a whole generation of teachers. Over the next decade, the Department of Education estimates we will need about 1.6 million new people to join the teaching profession. At a time when there is a growing need for qualified teachers, young people are being discouraged from entering the profession. We are losing too many qualified teachers because of student loan debt. It's not just a burden, it's a barrier.

NEA urges Republicans on Capitol Hill to put students ahead of politics and to keep interest rates from doubling in July. This is the right thing to do for students now and for our future.

Student loans are in fact a political issue – and a sexy one at that, not only because they’re a hot button issue for the “traditional” 18-24-year-old college student, but because they also impact 37 million voters today with outstanding student debt. While it’s true the potential interest rate hike will only affect the estimated 7 million students who take out subsidized Stafford loans next year, we shouldn’t think of student loan interest rates as an issue only affecting the young. The fact is that those 7 million students (and students in each year after, as long as rates stay increased) stand to lose more out of their paychecks for 10 to 20 years after school – the exact time period when they should theoretically be some of the most effective consumers in the U.S. marketplace.

Some pundits argue that the additional amount in interest students would pay - $1,000 on average over the life of the loan – really amounts to peanuts when spread out over time. But right now, every so-called peanut for student loan borrowers absolutely counts because student debt is coming perilously close to overloading debt to income ratios for the average borrower. Consider this example: For optimal financial health, personal finance experts recommend that Americans should devote no more than 37% of their earnings to paying down debt. For a recent college graduate, assuming the median annual salary of just around $42,569, that means $1,313 should be targeted for debt each month. A student debt load of $25,000 (the average today) at 3.4%, under a standard 10-year term, would translate into monthly payments of $246 –19% of the borrower’s income that should be reserved for debt. At 6.8% interest, the payment rises to $288, or 22% of income targeted for debt. That leaves the student loan borrower with just over $1,000 to pay a mortgage, car loan, and credit cards. It’s no wonder the Millennials are postponing starting out in life.

Unfortunately the Millennials’ delay (and the generations that follow) threatens to stall America’s fragile economic recovery in a harmful “trickle up” effect, because they can’t buy first homes or purchase consumer goods in a meaningful way for the first 10 or more years out of college. Ultimately, higher student loan interest rates negatively impact borrower debt to income ratios and lower these folks’ ability to be good consumers over the long haul – and that just doesn’t help anybody.

So what’s the long-term fix? First, we need to ask ourselves some tough questions: What’s the right rate, from a policy perspective, to encourage Americans to go to college and improve our nation’s global standing? And how much should the federal government really be profiting off of that student debt, at the expense of the borrowers’ financial health and wellbeing down the road? The rate of 6.8% in the current environment, by any standards, is high. But if Congress were to set an artificially low rate, and then average interest rates rise (as we know they all will, some day), we’ll end up having this same fight in reverse. An argument could be made, then, that student loan interest rates should be set by the market and closely mimic mortgage rates. While it’s true that the lender (in this case the government) cannot take back the education as the asset in the case of nonpayment (as they can with a home foreclosure), the nondischargeability of student loans in bankruptcy should provide adequate protection. Rate caps could be used – as they were pre-2007 – to protect borrowers should the rates skyrocket.

Of course, ultimately Americans have to answer the real macdaddy of all questions in the student loan debate: If college education is so good for the economy and our national competitiveness, then why is our policy to finance it with debt? Is this policy, although its intentions are pure in promoting equal access to college, really hurting the United States by threatening the economic viability of her consumers? Those are questions that won’t get answered by the looming July 1 deadline…but a day of reckoning for federal student aid policy could be coming.

There should be a proper discussion on the merits of a student loan interest rate that is more responsive to the economy - such as an interest rate that is capped but variable underneath based on economic conditions. However, Congress cannot stick college students with over $1,000 of extra student loan debt while they have that conversation. A year extension of current rates will buy time to allow a proper debate, and both short term and long term goals are important.

As we know, when time runs out on July 1, 2012, student loan interest rates will double on new subsidized Stafford loans for almost 7.5 million students. For each year Congress fails to act, students will be pinned with about a $1,000 of extra student loan debt. Students with the most need will pay an additional $5,000 over their education. Now is not the time.

The national recession has led to weak state economies, which in turn have squeezed college budgets. The result is higher tuition costs being passed on to students and families throughout the country. In 2011, 46 states dealt with budget shortfalls, resulting in double-digit tuition increases. In 2012, 42 states face budget shortfalls, and 29 will likely face shortfalls in 2013. Not only are students and families paying more for a college degree, but they have less money overall to deal with the increases they must pay. Unemployment remains high, at over 8 percent. Across all income levels, average family incomes are below what they were a decade ago.

It’s no surprise, then, that students have turned to loans to fill the gap between rising tuition and decreased family support. An increased interest rate from 3.4% to 6.8% makes a bad situation worse.

While college graduates fare better in the job market than those without a degree, high debt burdens have serious consequences for individuals, families and the economy. Student loan debt affects where graduates live, the kinds of careers they pursue, whether they try to start a new business, when they start a family or purchase a home, and when they can start to save for retirement. In fact, Americans 60 and older owe about $36 billion in student loans, and more than 10 percent of those loans are delinquent. As many as one in four of all federal student loan borrowers in repayment is past due. Late payments can negatively impact a borrower’s credit score for years. Not only is a borrower who misses a payment less likely to get a reasonably priced home or car loan, but increasingly her ability to get a job or rent a place is damaged.

Experts and lenders agree that students should exhaust their federal loan eligibility before even considering a private student loan. However, if federal loan rates double, more students and families are likely to make the mistake of turning to risky private student loans. Banks and private student lenders may aggressively market their private student loan products, emphasizing very low variable interest rates during temporarily low borrowing conditions and other tactics to entice borrowers away from the 6.8% fixed-rate federal loans. Like credit cards, private loans have variable interest rates with terms that intensify indebtedness. They have more stringent repayment requirements and provide far fewer protections than federal loans, such as the ability to defer payments after losing a job. They provide the worst rates and terms to those students with the least secure finances and are virtually impossible to discharge in bankruptcy. Already these loans are problematic; in school year 2007-2008, the majority of private student loan borrowers borrowed less than they could have from the federal student loan program. Once the interest rate hits 6.8% on subsidized federal loans, more students and families will make this mistake.

By preventing interest rates from doubling on subsidized Stafford loans and maintaining and improving the Pell Grant and the income-based repayment program for federal student loans, Congress will help keep college in reach for millions of Americans. Congress needs to do more, not less, to help Americans obtain the higher education and training needed to compete in today’s economy. Fixing interest rates at current levels will also buy more time to have a robust conversation on a more responsive interest rate.

Higher education in America continues to be vital for both individual success as well as the social and economic health of our country. Students and families are struggling to make ends meet. Congress should act to keep a college education within reach by stopping interest rates on subsidized Stafford student loans from doubling this July and lead into a longer conversation about student loan interest affordability next year.

Five years ago, Congress stirred a bit of extra sweetener into the College Cost Reduction and Access Act. Beyond offering federally subsidized Stafford loans at a guaranteed rate of 6.8%, Congress temporarily dropped the undergraduate rate as low as 3.4%. Now, the temporary 3.4% is set to expire. The impact? Not so much. Various experts calculate the change would cost the average new borrower between $7 and $25 a month over a 10-year repayment term. Meanwhile, the five-year projected hit to the federal debt is $30 billion.

How is Washington dealing with the possibility that new college borrowers may have to forego their extra subsidy of thirty to eighty cents a day? Not impressively. The same President Obama who once pledged that we were done “kicking the can” on tough decisions insists it's a national imperative to extend the largesse, while blatantly misrepresenting who will benefit and how much the reset matters. He’s suggested there will be big savings for recent grads struggling in today’s job market, and that his pandering is actually a response to a temporary crisis. In truth, the extended subsidy only applies to loans initiated in 2012-13—in other words, for students entering the job market in 2017 or so.

Republicans, not wanting to get outfoxed in an election year, have rushed to follow suit. Now, that’s leadership.