Republicans Tout Their Bill as Obama Prepares to Host Student Loan Event
Ahead of President Barack Obama’s event Friday urging Congress to avert a scheduled doubling of student loan interest rates on July 1, Republicans are needling the administration for opposing a House-passed bill that is similar to the White House’s own proposed solution to the problem.
“Tomorrow President Obama will hold an event at the White House to ‘call on Congress to prevent student loan interest rates from doubling on July 1st,'” reads an email from Republicans on the House Education and the Workforce Committee. “But wait a minute — the House has already taken action. ”
A separate email from the office of House Speaker John A. Boehner, R-Ohio, relayed the same sentiment: “The week after the GOP-led House passed a bill inspired by one of the president’s proposals to halt an upcoming hike in student loan interest rates, President Obama is holding an event at the White House . . . Confused? Us too. ”
Both emails underscore that the House bill (HR 1911) is based on a proposal included in the president’s fiscal 2014 budget request to peg the interest rate to the 10-year Treasury note. The GOP emails also emphasize that Education and the Workforce Chairman John Kline, R-Minn. , worked with Education Secretary Arne Duncan to write the legislation.
The House passed the measure 221-198 on May 23, with four Democrats voting for it and eight Republicans voting against it. The administration issued a veto threat against the bill a day earlier.
“Why is the president now turning his back on the only bipartisan proposal that embodies his plan to address the student loan interest rate problem? ” the committee email asks. “When bipartisan compromise is within reach, why is President Obama turning to petty politics and campaign gimmicks at the expense of students and their families? ”
White House spokesman Jay Carney announced at his Wednesday briefing that Obama will hold the event.
“On Friday, the president will be joined by college students here at the White House for an event where he will call on Congress to prevent student loan interest rates from doubling on July 1st,” Carney said.
Last June, after a three-month fight over budgetary offsets, Congress passed a one-year extension (PL 112-141) of the low, 3. 4 percent fixed interest rate for student loans. This year, lawmakers of both parties and the president have embraced the idea of shifting to a market-driven variable interest rate, but they are taking different approaches.
The House bill would peg interest rates to the 10-year Treasury note rate plus 2. 5 percentage points for the subsidized and unsubsidized portions of undergraduate loans and plus 4. 5 percentage points for graduate loans. Those rates would be capped at 8. 5 percent and 10. 5 percent, respectively, and the interest rates would be calculated yearly.
Alternately, the White House plan would peg interest rates to the 10-year Treasury note rate plus 0. 93 percent for the subsidized portion and 2. 93 percent for the unsubsidized portion. It would modify the loan for graduate students to 3. 93 percent above the 10-year Treasury note. Notably, the rates would remain fixed for the life of a loan, as opposed to being recalculated yearly.
“The president’s budget includes a proposal to guarantee students a low rate,” Carney said Wednesday. “While we welcome that House Republicans have paid some attention to this issue this year, their proposal, unfortunately, does not meet the test. It fails to lock in low rates for students.