The law will fix student loan interest rates to the 10-year U.S. Treasury note instead of using the current arbitrary formula. It will also establish interest rate ceilings and lock interest rates for the loan’s lifetime. In the process, interest rates will be slashed for the upcoming 2013-14 academic year, with undergraduate rates reduced from 6.8 percent to 3.86 percent.

The law will also retroactively apply to loans taken out after July 1, when interest rates on federal Stafford loans doubled after Congress failed to prevent the expiration of subsidies. Stafford loan interest rates subsequently doubled from 3.4 percent to 6.8 percent. The legislation is projected to provide $25 billion in debt relief for students in the next five years.

During the past month, legislators from both parties have tried to address both short-term problems stemming from the expiration of the subsidies and long-term problems such as the national trend of increasing student debt and its effects on the economy.

The final bill passed focuses mainly on the short-term problem of interest rates, and some leaders of the U.S. House of Representatives have questioned the long-term effectiveness of this solution.

“The bill helps reduce costs to students and families, but it does not solve the long-term student debt crisis,” said bill proponent Rep. George Miller, D-Calif., in a press release.

UC officials and students also worry that loan debt may become unsustainable when economic conditions improve and Treasury bill rates start to increase.

“In the long term, accounting for inflation, loans will become more expensive for prospective Berkeley students,” said Rachelle Feldman, director of the UC Berkeley Financial Aid and Scholarships Office.

She suggested variable interest-rate loans and income-sensitive repayment programs as changes to the student aid program, as they would better adapt to changing economic conditions.

Alex Lee, a senior at UC Berkeley, has relied heavily on federal Stafford loans since he started college and will continue to do so. He said that he has no way of paying for college other than loans.

“I’m essentially at the mercy of the student loan system,” Lee said. “Once I get out, I’m pretty much screwed.”

Undergraduate loans for the coming year will drop to 3.86 percent, and graduate student rates will be 5.41 percent. PLUS loans, which are offered to graduate students and the parents of undergraduates, will drop to 6.41 percent. All of these rates will be lower than the current fixed rates of 6.8 percent for Stafford loans and 7.9 percent for PLUS loans.

The bill will also establish rate caps to prevent student loans from becoming too expensive — 8.25 percent for undergraduates, 9.5 percent for graduate students and 10.5 percent for PLUS loans.

Contact Dennis Vidal at dvidal@dailycal.org.

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Lance Knobel/Courtesy

Berkeley City Councilmember Gordon Wozniak is garnering national media attention for his recent suggestion of an email tax.

The San Francisco Chronicle, the Los Angeles Times and the Huffington Post have all recently covered Wozniak’s proposal of a tax on email that could help in generating funds to aid the U.S. Postal Service, which is currently experiencing financial difficulties.

“It must have been a slow day in the media,” Wozniak said regarding his recent media attention.

Wozniak has since faced significant backlash to his email tax proposal, receiving a fair amount of hate mail for the idea.

However, Wozniak is not the first to consider an Internet tax. The “bit tax” was first proposed by Arthur Cordell during a talk at Harvard Law School in 1997 and was also explored later by the United Nations, according to Wozniak.

Wozniak believes that a bit tax or email tax could serve as a measure to effectively gain revenue that the government needs to support other public works in addition to the Postal Service, such as education and health care.

“(If you consider) the terabits of data per second sent around the world, that’s billions, trillions of bits — even a small tax would generate substantial revenue,” Wozniak said.

Under the Internet Tax Freedom Act passed in 1998, it is currently illegal to place a tax on Internet usage. The act will expire in 2014, and it will be up to Congress to decide whether or not the act should be renewed indefinitely. There are presently no plans for a federal Internet tax to be implemented. Nevertheless, Wozniak remains hopeful.

“The idea is out there,” Wozniak said. “Things could change in the future, but it’d have to be changed on a federal level.”

Contact Jennie Yoon at jyoon@dailycal.org.

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The state of California is expected to see a $500 million cut due to sequestration in coming months, which will influence the scope of health, community services, law enforcement and education programs provided throughout the state and in Berkeley.

While the city has yet to receive precise details on the nature, timing and placement of the sequester’s cuts, city officials grimly anticipate the consequences for various social services.

“Our community in Berkeley, along with communities in California and across the nation, will feel the impact of sequestration,” said Councilmember Jesse Arreguin. “It’s really unfortunate that Congress did not try to find a solution. It is compromising our economy, resulting in loss of jobs and cuts to education.”

Arreguin noted that those reliant on the city’s social services, such as senior citizens, the disabled and low-income to working-class families, will be hit especially hard due to these cuts.

“I think it’s going to spread a lot of pain,” said Councilmember Kriss Worthington. “The different nonprofit organizations that get these grants are the safety net that provide extremely important programs to poor people. There will be pain spread around the city.”

The Housing and Community Services Department of Berkeley projected that an 8.2 percent decrease in federal funding would result in a $666,000 reduction in the next fiscal year. This will impact services including city staffing, funding for affordable housing development and rental subsidies for homeless clients. Health services, such as the senior citizen nutrition program and vaccinations for children, will also be impacted.

Statewide cuts to primary and secondary education and law enforcement grants will also impact the city’s public schools and safety services. The Berkeley Unified School District estimates an approximately $300,000 reduction for the 2013-14 fiscal year, according to Deputy Superintendent Javetta Cleveland.

Berkeley Police Department has recognized that it will be impacted and is currently evaluating data to understand the extent of the effects, according to Officer Jennifer Coats, spokesperson for BPD.

But due to the lack of specifics regarding how deeply city services will be impacted, the city currently remains unable to take any immediate action in response, according to Worthington and Arreguin.

However, Worthington expressed hope that Congress will come up with a solution before these cuts come into effect. At this point, the city is still looking at what is possible, such as lobbying in Washington, Worthington said.

“The sequester really will have a detrimental impact on Berkeley,” Arreguin said. “The longer this goes on, the worse the situation will become.”

Contact Sophie Ho at sho@dailycal.org.

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Graham Haught/Staff

Editor’s Note: This is a general op-ed sent from the White House to address a college audience.

In my State of the Union address, I laid out ways Democrats and Republicans can work together to reignite the true engine of America’s economic growth — a rising, thriving middle class.

We should ask ourselves three questions every day: How do we bring good jobs to America?  How do we equip people with the skills those jobs require?  And how do we make sure hard work leads to a decent living?

Strengthening the middle class requires making America a magnet for new jobs and manufacturing and rewarding hard work with wages that allow families to raise their children and get ahead.  But it also means recognizing that the surest path into the middle class will always be a good education.

As college students, you’re already well on your way.  The education you’re getting right now is the single best investment you can make in yourselves and your future, and it will put you in the best position to get a good job and build a great life for yourselves and your families.  Now it’s up to us to help keep the cost of that investment within reach and to give even more Americans the opportunity to earn the education and skills that a high-tech economy requires.

We should start in the earliest years by offering high-quality preschool to every child in America, because we know kids in programs like these do better throughout their academic lives.  And we should redesign America’s high schools to better prepare students with the real-world skills that employers are looking for right now.

But the truth is, most young people will need some type of higher education.  It’s a simple fact: The more education you have, the more likely you are to have a job and work your way into the middle class.  And that means we have to do more to make sure skyrocketing costs don’t price you and your families out of a college degree, or saddle you with mountains of debt.

Already, my administration has worked to make college more affordable for millions of students and families through a mix of tax credits, grants and loans that go further than before.  But we also need to do something about the rising cost of college.

Over the last two decades, tuition and fees at the average college have more than doubled, and right now, students who take out loans end up leaving college owing more than $26,000.  That much debt can force you to pass over valuable opportunities that don’t pay as well — like working for a nonprofit or joining an organization like the Peace Corps.  And it can mean putting off big decisions like when to buy your first house or start a family of your own.

That’s why colleges also need to do their part to lower costs.  And we need to make sure they do, because the taxpayers can’t keep subsidizing the rising costs of higher education.

Already, I’ve called on Congress to consider value, affordability and other factors when it decides how much federal student aid a college should get.  And we released a new “College Scorecard” that lets students and their parents compare schools based on simple criteria: where you can get the most bang for your educational buck.

As a nation, our future ultimately depends on equipping students like you with the skills and education a 21st-century economy demands.  If you have the opportunity to reach your potential and go as far as your talent and hard work will take you, that doesn’t just mean a higher-paying job or a shot at a middle-class life — it means a stronger economy for us all.  Because if your generation prospers, we all prosper. And I’m counting on you to help us write the next great chapter in our American story.

Barack Obama is the 44th president of the United States.

Contact the opinion desk at opinion@dailycal.org.

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Creative Commons/Courtesy

Here’s to second chances, I guess.

Congressional approval ratings reached record lows this year, according to a September Gallup poll. Widespread ambivalence toward President Barack Obama’s first term in office dominated American political discussion from 2009 until the 2012 elections, affirmed by job approval ratings that hung around 48 to 50 percent for much of this year. On top of all that dissatisfaction, a firm majority of Americans held and continue to hold the opinion that the country is headed in the wrong direction.

It might seem a vote-the-bums-out attitude should have prevailed as Americans participated in their democratic right to referendum last night. With all the hubbub and overblown drama of this election cycle, it might have also seemed logical for the face of American government to change at least a little. When democratic leaders are unpopular or their policies and politics fail, they’re supposed to lose office.

But that didn’t happen Tuesday night.

Despite the sluggish economy and his controversial health care legislation, Obama won re-election fairly easily. Congress, despite approval ratings that dipped down nearly into single digits, looks remarkably the same as it did before. Not only did Democrats retain a majority in the Senate and Republicans maintain a majority in the House, but just 23 incumbents of the total 535 members of Congress were ousted in this year’s elections, as called by the Associated Press Tuesday night.

Essentially, Americans voted for the status quo.

Maybe we bought the president’s it’s-all-Congress’-fault spiel, or maybe Mitt Romney was just too phony for the middle class. Maybe Republicans focused too much on anti-Obamaism to win the Senate and Democrats didn’t think creatively enough to make gains in the House. Maybe “Hope and Change” won again yesterday, or maybe the pandering cluelessness of Democrats looked like a better option than the demagogic political manipulation of the GOP.

Obama didn’t change the political landscape of the United States, but he stood out in contrast to a GOP that couldn’t see past the fact that Obama wasn’t one of them. Compared to John Boehner, Mitch McConnell, the “Young Guns” — and Harry Reid and Nancy Pelosi, too — President Obama stood for maturity and cool-headed leadership in a sea of floundering, partisan, out-gunned and overwhelmed legislators.

Election season is over now. The government has been established, and it’s time to move on. The curtain must fall on the election-style drama that never seemed to fade after 2008. It’s time to get down to the day-to-day work of democratic leadership — the riveting drama must be forgotten, and the mind-numbingly boring life of the policy wonk must be embraced. Leaders in both the current congressional session and the next simply need to start governing.

Here’s to hoping the next four years are more productive, more focused and more deliberate than the last. Here’s to hoping Barack Obama gets his mojo back and that the House and Senate finally start talking to each other again. Here’s to hoping Americans have their faith restored by a government that honors, shapes and leads public opinion with courage and resolve in all 50 states.

Here’s to second chances and the redemption that follows.

Image Source: Barack Obama via Creative Commons

Contact Connor Grubaugh at cgrubaugh@dailycal.org.

The post Second chances for the second-rate appeared first on The Daily Californian.

Let’s start with the good news. On June 29, Congress reached an agreement to keep student loan interest rates at 3.4 percent, two days before they were scheduled to double.

Then there’s the bad news. Lost in the discussion and exposure of the interest rates was an equally pressing issue with disastrous and far-reaching consequences: The federal government is removing the six-month interest grace period for student loans, undergraduate and graduate, and will no longer cover interest on graduate student loans.

Simply put, this is not fair to students. It’s hard enough to get a job straight out of college. A bachelor’s degree often is not enough. Losing the grace period, however, is a huge disincentive to go to graduate school. Many students can’t support that kind of financial burden. We are already in debt from four years of college with increasing tuition; now we’ll have to pull out loans to cover our other loans.

It’s not right to change the rules in the middle of a race. Students and families made agreements — and now the government is coming in and breaching those agreements. At the very least, the change should not affect existing loans.

The whole situation seems shady and suspect. These changes took effect on June 1 but no fuss was made, nobody seemed to know it had happened. We wonder why the government was not more open about it and why it was absolutely necessary for them to do so in the first place.

Students should be talking about it. The government did not do a satisfactory job of informing the public, so, like everything else, it falls on the students to inform themselves and others. We should not let last week’s “victory” of interest rates not doubling cloud our perception. There are many more battles, and just because one went our way does not mean we should become complacent.

Higher education is supposed to be a big deal in the upcoming election. Show us. Talk about losing the grace period as much as not doubling loan interest rates. Put them on equal footing. Convince us you actually care.

The post Fall from grace appeared first on The Daily Californian.

Nicole Lim/Staff

On June 15, 2012, President Obama announced a policy at the White House that would save around 800,000 illegal immigrants in America from deportation. These people are eligible for work permits and a two-year deferred action as long as they:

1. were brought to the United States before they turned 16 and are not above 30;

2. have been in the country for at least five continuous years;

3. have no criminal record;

4. have graduated from a U.S. high school, earned a GED or have served in the military.

Obama’s announcement has left members of the Latino community celebrating around the country and the GOP furiously reacting to his decision. Putting the public response aside, the impact of the policy change may not be quite positive as some may think. Even though the policy change represents a humanitarian effort intending to push Congress to pass the DREAM Act, it is problematic in its reasoning, temporary in its effect and narrow-ranged in its targeted population.

At first glance, relieving 800,000 young and “good” illegal immigrants from their lifelong fear of deportation seems to be “the right thing to do” — as  declared by President Obama during the Rose Garden address. These young people were brought to the United States illegally by their parents with “no idea that they (were) undocumented.” Many have assimilated into American culture and society through education. They have adopted all the U.S. identities culturally and nationally except one — the legal identity. Therefore, Obama’s policy is a humanitarian effort that alleviates thousands of young illegal immigrants from bearing the burden of their parents’ wrongdoing and provides them with a bright future.

Yet, the humanitarian idea behind Obama’s policy is deeply problematic. It benefits the youngsters who were brought to the United States illegally before they turned 16. But how about their parents who brought them here? If a humanitarian policy means removing the unfair burden from the young illegal immigrants, how is it humane when such policy also means breaking their families apart?

Supporters of the new deportation policy may argue that such a dilemma can be resolved by pushing forward the DREAM Act. Under the bill, young illegal immigrants who qualify for similar requirements listed under Obama’s deportation policy stand a chance to attain permanent residency. Once they become permanent residents, these young people can sponsor their parents to apply for permanent residencies on the basis of family reunification.

However, opponents of the DREAM Act rebut that the influx of those immigrants could potentially hurt the already suffering U.S. job market. This is true. Traditionally, the inflow of unauthorized immigrants has arguably supported the U.S. economy, as most of them take up the low-end jobs not favored by the native-born Americans. Yet what the DREAM Act will unleash is a group of educated and skilled immigrants, once bounded by illegality, who will pose strong competition to the native U.S. workers.

A similar argument is made by the Republicans regarding Obama’s deportation policy. Rep. Lamar Smith, R-Texas, commented: “How can the administration justify allowing illegal immigrants to work in the U.S. when millions of Americans are unemployed?” Yet, such a remark is an overstatement. These newly authorized young workers are facing the same job market as anyone else. They too have to face the fierce competition of the job market and the risk of unemployment. On a local scale, they will consider themselves members of the formal workforce and are unlikely to settle for a lower wage, as their predecessors traditionally have. This will allow local employers to consider them and native workers equally, without harming the locals’ job prospects. Thus, the impact of Obama’s deportation policy on the U.S. job market is insignificant.

Unfortunately, the new policy “is not a permanent fix,” President Obama recognized in his announcement. “This is not amnesty … this is not a path to citizenship.” These young people will only be able to apply for a citizenship or permanent residency after Congress passes the long-stalled DREAM Act. With the fierce opposition from the Republicans, the DREAM Act will unlikely be passed in the near future. That means if one day these newly authorized minors lose their jobs after their work permits expire, they will again face the risk of deportation.

The effect of the new deportation policy is also narrow-ranged. It excludes a potentially large number of young illegal immigrants who satisfy most but not all of the policy requirements.  These youngsters generally grow up under impoverished conditions and receive poor attention from parents and teachers. They are prone to academic inadequacy and minor misconduct, which are at least partially the result of their parents’ and teachers’ irresponsible actions. Compared to qualified individuals, these young illegal immigrants bear a heavier burden of their parents’ wrongdoing. If it is morally imperative to relieve the 800,000 qualified illegal immigrants from the burden of their parents’ misbehavior, then why not the “almost-qualified” individuals too?

President Obama’s bombshell announcement of the new deportation policy before the upcoming presidential election may simply be “a political act.” Yet, parties of concern should recognize the overall impact of the policy. The deportation policy may endow thousands of young, inspired and talented people the freedom to pursue a brighter future, but it will leave many more brokenhearted, as it relieves neither the parents of these youngsters nor the many “almost-qualified” individuals from the risk of deportation.

Shi Yi is a UC Berkeley junior.

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According to Obama, a cut in federal Stafford loan interest rates that Congress passed in 2007 is scheduled to expire July 1. If Congress does not pass the Stop the Rate Hike Act of 2012, which maintains the current 3.4 percent interest rate, by the end of the month, rates will double to 6.8 percent for the more than 7 million students with Stafford loans.

In April, Congress came to a gridlock between two different bills that would generate the $6 billion in subsidies needed to maintain the reduced interest rates — Democrats favored a bill that would generate money from cutting subsidies for oil companies, while Republicans favored a bill that would generate money from repealing a program from the country’s new health care plan.

Obama has been visiting college campuses to call on students to email, call and tweet lawmakers into action. He started a #DontDoubleMyRate Twitter campaign, through which people have been mobilizing to tell Congress to keep student interest rates reduced.

Earlier this month while visiting University of Nevada, Obama told students low student loan interest rates should be Congress’s priority in maintaining affordable higher education.

“The number one thing Congress should do for you … is to stop interest rates on student loans from doubling at the end of the month,” Obama said in his speech. “The clock is running out. You know, in today’s economy, higher education can’t be a luxury. It’s an economic necessity. Everybody should be able to afford it.”

UC spokesperson Dianne Klein said in an email that the university is also doing its part to keep the interest rates low.

According to Klein, more than 76,300 UC undergraduates received subsidized Stafford loans in 2010-11, and if the bill is passed, these estimated student borrowers could save approximately $1,000.

Klein said UC President Mark Yudof has written letters regarding the bill to Obama, Senator Dianne Feinstein, D-Calif. and all 55 members of the California congressional delegation.

“It is critically important that the federal government work together to keep borrowing costs low for students and their families,” Yudof said in the letter to Feinstein. “I urge you to take action to ensure that the interest rate on subsidized Stafford student loans does not double from 3.4 to 6.8 percent on July 1, 2012.”

Derek Zhou, president of Berkeley College Republicans, said the organization supports the bipartisan effort to extend current loan interest rates and gave his perspective as a UC Berkeley student.

“On behalf of myself, I think spending in education is certainly a good thing — the question is whether the money is always used effectively,” Zhou said.

Campus CALPIRG Treasurer Spencer Pritchard said the organization has been advocating for continued low interest rates as well.

Pritchard said the organization held a campus event on Valentine’s Day asking Congress members not to break its heart by doubling student loan interest rates. Since then the organization has sent out hundreds of student petitions and been to press conferences with Congresswoman Barbara Lee,  D-Oakland and Senator Barbara Boxer, D-Calif., to put pressure on Congress.

“Personally, I have these loans, and (the increase) will make it harder for me to pay off my loans,” Pritchard said. “It could affect my debt and make it harder for me to start other things in the future like buy a house … I think all students understand that you don’t want to be in a bind.”

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We applaud President Barack Obama’s move to stop deporting young immigrants who came to the United States illegally as children.

Obama’s Friday announcement, which could impact more than one million people, allows young undocumented immigrants to obtain work permits provided they meet a series of qualifications. Those include that the individuals have immigrated to the U.S. before the age of 16 and lived here for at least five successive years without a criminal history.

It does not give immigrants amnesty or a pathway to citizenship. However, the president’s action is a momentous step in the right direction. It’s great to know that these people who contribute to our country — who, for all intents and purposes, are Americans — won’t be deported. It also gives people an incentive to pursue higher education or to serve in the armed forces.

The announcement by no means quells the need for the passage of the federal DREAM Act, which would indeed provide a path to citizenship for young undocumented immigrants who serve in the military or go on to college. Obama’s administration has even stated that the policy change is not a permanent fix, and that the only way to do so would be for Congress to pass the DREAM Act.

Hence the political implications. Just months before the presidential election, it is hard not to see the political advantages — or disadvantages — of the president’s policy change. Yes, the announcement will probably help Obama secure the Hispanic vote. It probably helps his chances in battleground states like Nevada and New Mexico. It probably hurts Sen. Marco Rubio, a leading Republican seen as a possible vice-presidential candidate for the GOP’s presumptive nominee Mitt Romney. Romney has already said he would veto the DREAM Act.

So what if it’s political? Obama is, after all, a politician. What should matter is that he did the right thing. And those politics probably don’t matter all that much to the millions of immigrants who can now live in the U.S. without the fear of deportation.

With all the gridlock currently in Congress, there is nothing wrong with using the power of the executive branch. Still, we would like to see Obama work with Congress to make a permanent solution, as this policy change helps in the short term. It is a placeholder for the DREAM Act. And now, with less of a fear of being deported, these immigrants can rally around the DREAM Act and push to make this immigration reform more far-reaching and permanent.

We are elated with the president’s move, but this shouldn’t be the end.

The post Dream on appeared first on The Daily Californian.

This letter is in response to the editorial “On good terms,” originally posted June 4, 2012. There are many sound arguments to be made against term limits, but allowing legislators to “worry less about reelection” is not one of them. It is one thing to assert that eliminating or extending term limits allows for more effective deal-making and coalition-building within the Legislature. It is another to fallaciously claim that nothing but good can come from lengthening the time legislators may serve in their chamber of preference — the admitted purpose of Proposition 28 — or to deceptively imply that safeguarding incumbents will directly result in a personal relationship between legislators and constituents. Nor will enacting such protections allow for the continued influx of new people and ideas into the Capitol. Rather, these arguments sound like those of a career politician whose only fear is having to face anything but his safe, gerrymandered constituency, or an end to his sheltered tenure in Sacramento.

Legislators must be kept accountable, not protected.

— J.F. Grant
Berkeley

Young voters are key to effecting political change

Democracy calls for compromise — but incompetent Congresses have compromised our whole country! For decades, Congress has continually added more debt — on our credit card — and just passed it on, causing our current crisis.

Since Congress refuses to change, we have to change Congress: Vote out all “soiled” incumbents! All of Congress must be made to realize their first duty is to country — no less than the same duty required of the youth they send to war! Congress can and should be rewarded for their patriotism — or lack thereof!

We have a real opportunity to kick-start Congress! “No soiled incumbents” says it all! This election should be more about those voted out! Their numbers are the incentive (force) to change Congress! With undeniable proof of the value of our vote, the possibilities are huge!

With no politics or party, college students and all young voters can join in free, common cause against their unfair, lifelong debt and rising college costs. Millions of frustrated youth to promote the vote! With their Internet — think Egypt — they can be an invaluable voice!

It’s not only our right but our duty — and our fault if we don’t! The solution can give citizens some control, no matter who’s in office — and even force an effective “Ethics Committee!” It can also give vent to public frustrations — with real, immediate, satisfaction! Maybe even dancing in the streets — instead of riots! All with our votes, as intended!

Consider the possibilities: youngvoterssolution.com

— Rich Aguilar
Mendocino, Calif.

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