How Cheap Should Student Loans Be?

Both Obama and Romney want to keep student loan rates low. Josh Barro disagrees:

The clear instinct of Democrats (and some Republicans, including Romney) is to defend cheap Stafford Loans in an effort to be on the side of education. But subsidizing education need not mean subsidizing borrowing. We’d be better off letting student loan interest rates rise and augmenting the other ways we help students pay for college.

Wilkinson seconds him. Mike Konczal, on the other hand, notes that the current low rates make the government money:

As Alan White notes, according to the "Congressional Budget Office, $37 billion will flow IN to Treasury from student loans made this fiscal year at the 3.4% rate (on a net present value basis and net of about $1.5 billion to administer them.) "  If anything we should make rates lower than 3.4%.