The issue of student loan interest rates has been simmering for a while, but with a deadline looming in July, Democrats are moving quickly to put the issue to the front burner.
At issue is a 2007 law, set to expire on July 1, that keeps the interest rate for federal Direct Stafford Loans at 3.4%. If Congress fails to act, the rate will double, so Reps. Gary Peters (D-Mich.) and Joe Courtney (D-Conn.) have put forward a bill to make sure that doesn’t happen.
When the 2007 measure passed, it enjoyed broad bipartisan support, but Republicans have clearly moved sharply to the right in the ensuing five years, and are now balking at Democratic efforts.
The White House seems to feel strongly about the issue.
White House press secretary Jay Carney swiped at Republicans on Friday, saying that they should prevent student loans rates from doubling in July.
“You really have to have a brick in your head not to understand that education is the cornerstone of our economic future,” Carney said.
Education Secretary Arne Duncan added, “At a time when going to college has never been more important, it has also unfortunately never been more expensive. Families and students are struggling to meet these costs. And there is no reason we should add to their burden.”
Did I mention that President Obama will be speaking on college campuses in the coming days in North Carolina, Colorado, and Iowa? Expect to hear him talk about this quite a bit.
In fairness, it’s worth noting that Republicans have argued, accurately, that the lower rate would cost about $6 billion according to the Congressional Budget Office, and Democrats haven’t said much about how they’d pay for the extended rate freeze.
Then again, House Republicans just passed an unnecessary tax cut bill with a $46 billion price tag, which they didn’t try to pay for, either. For GOP officials to say we can afford to add $46 billion to the deficit for a tax break, but we can’t afford $6 billion on student aid, is a problem.
Besides, if the Buffett Rule only brings in $7 billion a year, and congressional Republicans characterized that as an effectively meaningless rounding error in the context of the larger budget, why should the GOP balk at $6 billion a year to help students and their families better afford tuition costs?
As for the president’s likely opponent, Mitt Romney has said he intends to dramatically scale back the federal role in helping students go to college.