The GOP-led House is set to vote Friday on a bill to extend the low 3.4 percent interest rate on US-subsidized student loans. Obama wants that, too. But how to pay for it is kicking up dust in Congress.
Who's playing politics on student loans? Answer: everybody.
On July 1, interest rates on federally subsidized Stafford student loans, held by 7.4 million Americans, will double from 3.4 percent to 6.8 percent.
A little background: Last week, Democrats figured the pending rise in student loan rates would be an excellent way to needle Republicans and rouse a key constituency: young voters (and perhaps their tuition-paying parents, too). Democrats figured that Republicans would blanch at spending the $6 billion it would take to extend the lower loan rate for another year. Moreover, they could again score points off one of their big bogeymen – the House budget authored by Rep. Paul Ryan (R) of Wisconsin, which did not extend past July 1 the lower rate on student loans.
Then something funny happened: GOP presidential nominee Mitt Romney quickly endorsed an extension of the lower rates. That broke the Republican dam, and suddenly student loan rates were definitely not going to rise.
"This is not a partisan issue," House Speaker John Boehner said Wednesday. "No one here expected that interest rates [on new student loans] were going to go up in July."
Mr. Boehner said the House would vote on a measure on Friday. That was a leap in front of Senate Democrats, who originally had pushed the issue. They slated the legislation for a vote sometime after next week's district work period for both houses.