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-- representatives passed a bill that would link that rates students pay to the ten year treasury.
Setting up a possible showdown with the White House which is threatened to -- that bill.
-- -- break -- down I just global insight consumer markets economist Chris Christopher Chris welcome to you.
Good to be here so this is turned into a partisan fight over student loan rates what's the next -- Well it has been -- partisan fight even back in the campaign but the next step is to sort of see how things play out.
Currently rates are set to increase by double for a student loans a body on July 1.
And there's some political wrangling happening but the concern should be on the students and the country as a whole.
Has it really.
Been eight political fight for awhile because it seem like it was it pretty easy sell a year ago -- part of the transportation bill right when congress voted to extend the low rates for at least another year so that's what we're bumping up against right is the expiration of that most recent extension.
Is that true and there's some people want -- extend -- for a couple more years and sort of like mark kick the can down the road type of thing.
And I I guess the GOP from the house to sort of thinking.
Well enough is enough and we we need to do some -- and they're trying to.
Maybe reduce the deficit a little bit and in addition they're thinking maybe by having rates eventually increase by tie into the ten year.
Treasury yield that that might limit some sort of students who might not be needed in the educational system.
What's your expert opinion on what student loan rates.
Where they should be the federally backed rates.
Well my my expert opinion this sort of look at it this way if you want more students he -- higher human capital in this country.
In -- -- -- you get a few bad students and you'll get people who want to major in something like a -- Shea or some thing back home that's okay well fine and dandy.
Did that do they approach that you should -- think of is try to make it easier for them so this -- becomes more you know the human capital intensive and so we can't compete in this country.
But isn't part of the problem that with these.
Low interest rates and this flood of credit available to students universities are able to charge higher and higher tuition.
So is that part of the problem yet.
Yes that that's sort of is true if you look at it it when demand supply -- -- point of view.
However what really made a lot of students go to college was the recession that sort of the Great Recession that began.
In the last month of 2007.
With how many job opportunities they sort of said OK well.
The best thing I can do at this point is you know go to college now they're you know they're coming out of college you can we get the best jobs be -- wage growth isn't very good.
The job opportunities are not good however all said and done you're better off going to college.
However you -- I can do as well as your parents is sort of the general line of thinking.
Yeah and it's having broader economic implications right these students who are saddled.
With this enormous amount of student loan debt what are some other solutions Chris I know.
Student loan debt is unforgivable in bankruptcy should that be changed.
That might help out a bit it would -- you know you're there will be a lot people who would sort of you know to a full bankruptcies -- liking -- cancer walk away from that makes it's much different on the you know compared to our European.
It -- compared to European countries where.
You can't even walk away from -- house however.
One of the solutions may be is to sort of tried to limit tuition increases that might help out a bit.
The public school systems at the you know university level are suffering quite a bit because of what's happening in state and local government.
And that's another kind of thing that sort of increasing tuition as well.
It is a problem thank you so much Chris Christopher I HS global insight.
All right coming up -- will.
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