The president called on Congress to address the problem of rising student loan interest rates Friday. Interest rates are currently at 3.4% for subsidized Stafford Loans, but without action, those rates will double on July 1, to 6.8%. The White House says the president’s plan will save the an college freshman, who borrows $27,000, an average of $4,000 over the life of their loans.
The White House also claimed the House Republican plan would cost that same student $200 dollars more than if the rates rise to 6.8%.
Republicans made the suggestion that the president’s Friday remarks were more about changing the subject from recent scandals, including Benghazi and the IRS, than about student loans.
“Picking a fight out of thin air where there’s policy agreement isn’t going to get the White House out of trouble,” said Brendan Buck, spokesman for Speaker John Boehner.
And Congressman Luke Messer (R-Ind.) picked up on the same narrative during an interview on Friday’s The Daily Rundown.
“The real threat to college-age students in America today is not a few more dollars on their student loan, it’s the fact, the explosive growth of debt” Messer said. “The fact that the jobs in this economy for young people entering the marketplace have been the people probably most hurt by the Obama policies.”
But, Congressman Chris Van Hollen (D-Md.) shot back on Jansing & Co. insisting that fixing the problem is a priority and time is running out. There is about a month until those rates double following the expiration of a one-year temporary reprieve that Congress agreed to last year around this time.
“To suggest that this is an effort to distract attention from other issues is a bunch of nonsense, because if we don’t fix this issue, people are going to be stuck with these higher rates,” Van Hollen said.
There are policy disagreements between the Republican bill and the president’s plan. Both agree that student loans should be tied to market rates, but the president’s plan would lock in rates for borrowers and the GOP plan would not.