White House Sets the Stage for June Battle over Student Loan Interest Rates
May 30, 2013
On Wednesday, President Obama announced plans to gather college students in an effort to draw attention to the scheduled rise in interest rates on federally backed student loans, reports The Hill. On July 1, the interest rate for subsidized Stafford loans is set to double from 3.4 percent to 6.8 percent.
The Obama administration and Congressional Republicans have both proposed long-term fixes to that would peg the interest rates to market-based Treasury bonds, but disagree on the specifics of the plans. President Obama promised to veto the Republican-backed House-passed Smarter Solutions for Students Act (H.R. 1911) if the bill advances in its current form.
Congressional Democrats strongly oppose the House measure, arguing that the bill could allow rates to rise well above 6.8 percent in the coming years. Instead, they are pushing for a plan “ outlined in a Senate bill targeting the interest rate issue (S. 953) “ that would postpone the interest rate increase for the next two years, as Congress works to reauthorize the Higher Education Act.
The White House went further with the announcement of Friday’s scheduled event with college students, making it clear that Democrats would wage a public campaign against the GOP bill in an effort to secure a different solution, The Hill reported.
Congress returns to work next week with less than a month to stop interest rates on student loans from rising, but with no clear sense of whether the two parties can agree on a solution.
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The Hill
Michelle Cormier Mott
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