WASHINGTON – President Obama tried to resurrect a successful strategy from his election-year playbook on Friday when he warned of a pending jump in student loan rates and urged Americans to call, write and tweet their Republican members of Congress to head it off.
College students are taking on "more and more debt to pay for this investment," Obama said during a Rose Garden event with dozens of college students. "That doesn't just hold back our young graduates. It holds back our entire middle class."
But Republicans scoffed at the president's call to arms, pointing out that House Republicans have already passed a measure to avert increased rates on subsidized student loans. "No one should be fooled by today's campaign-style event," said Senate Republican leader Mitch McConnell of Kentucky.
The two sides are haggling over how to prevent the rise in interest rates. If Congress and the president don't take action by July 1, interest rates on subsidized Stafford loans will double from 3.4 percent to 6.8 percent.
They're also re-enacting a battle Obama won last summer after he raised awareness that the rates were about to go up. This spring, Republicans were on top of the issue and passed their own plan to prevent the increase. The plan would tie the interest rate to the 10-year Treasury rate. The rate would then readjust with the Treasury rate every year, meaning it could fluctuate over the life of a particular loan — but only within predetermined caps.
But the White House says that isn't good enough because it doesn't lock in a rate, as the president's plan would do. Criticizing the GOP plan, Obama said it could mean $1,000 more per year in costs for some borrowers. "The Republican proposal fails to lock in low rates for students next year," Obama said. "That's not smart. It eliminates safeguards for lower-income families. That's not fair."
McConnell criticized the president for politicizing the issue. "Here's one issue where the two parties can and should find quick agreement," he said. "Unfortunately, the president appears more interested in needlessly stoking partisan divisions in Washington than helping young Americans."
