The government’s subsidized student loan program, a marquee issue for President Barack Obama last year as he courted young voters on the campaign trail, is back on the White House agenda one month before a scheduled interest rate increase. But Obama’s push to avoid the increase is far more low-key than it was in the election year.
The president hosted college students last week at the White House as he called on Congress to keep the rates from doubling on July 1. But faced with a similar deadline, Obama by this time last year had launched a full-throated campaign to pressure Republicans to act, delivering speeches at college campuses and high schools in presidential battleground states.
Congress eventually extended the rate for one more year. Obama and his aides often point to their effort as an example of how they can mobilize the public to force lawmakers to act.
This year, Obama has been less confrontational, proposing a student loan plan in his budget and waiting to see what developed in Congress.
Last week, the House passed legislation that would link the rates to the financial markets by pegging them to fluctuations in 10-year Treasury notes. The White House threatened to veto it if that’s the version that lands on his desk. The Senate has yet to act.
In the House, Rep. Mike Coffman, R-Aurora, voted for the measure, as did the rest of Colorado’s Republican delegation. The state’s three Democrats in the House were split on the bill, with Rep. Diana Degette, D-Denver, and Rep. Ed Perlmutter, D-Golden, opposing it, while Rep. Jared Polis, D-Boulder, joined republicans in backing the plan.
Obama’s proposal also would link the rates to the financial markets — a step opposed by many liberals. But Obama’s plan, unlike the Republican proposal, would lock in the rates for borrowers. The Republican plan would set a cap.
“While we welcome that House Republicans have paid some attention to this issue this year, their proposal unfortunately does not meet the test,” White House spokesman Jay Carney said last week. “It fails to lock in low rates for students while also eliminating a safeguard that provides middle-class families most in need with lower interest rates for student loans.”
Rep. John Kline, R-Minn., chairman of the House Education and the Workforce Committee, has said his proposal has a number of similarities to Obama’s plan and has described his proposal as a starting point for negotiations.
Some Democrats are seeking a two-year extension of the current rates until Congress takes up a higher education bill later. Republicans have rejected that proposal — expected to cost taxpayers $9 billion — as costly and irresponsible.
Obama’s event on Friday comes as Congress prepares to return to Washington after a weeklong Memorial Day recess that has given Obama a respite from triple controversies, including an admission by the Internal Revenue Service that it singled out conservative groups for special scrutiny during the two previous election cycles.
“It’s obvious that the White House would love nothing more than to change the subject from its growing list of scandals, but scheduling this PR stunt reeks of desperation,” Brendan Buck, a spokesman for House Speaker John Boehner, R-Ohio, said in a blog post Wednesday. “Picking a fight out of thin air where there’s policy agreement isn’t going to get the White House out of trouble, and it certainly doesn’t do anything to help students facing a looming rate hike.”
Regardless of what ends up happening in Washington D.C., local schools say they are taking steps to help high school students better understand student loans before they use them to pay for college. Paula Hans, a spokeswoman for Aurora Public Schools, said the district’s Individual Career and Academic Plans include lessons about students and the cost of college for ninth, 10th and 11th grade students. High school seniors also have financial planning discussions, something the school district has offered for several years, she said.
Aurora Sentinel reporter Brandon Johansson contributed to this report.
With half of college graduates (bachelor or master degrees) leaving college and moving back home to live with family, friends, or others and working as taxi drivers, burger flippers, store stockers, why don’t they cut out the expensive college and go straight to jobs. When economy improves (years from now) they will know what they want to do, and can work to pay for the college courses they want then. Taking out loans make it too easy to get into heavy debt, then shop around through several skill areas, before settling on one they can handle. High school years should be in vocational schools for same reason. We still need carpenters, beauticians, auto mechanics, plumbers, and the other skills of vocational area. Would cut the need of business to hire illegal aliens also. That was way of the 1940s through 1990s, and worked for prior high school graduates. Going into debt for long time and not knowing what future will be, is not logical.