House Republicans Seek Initiative on Student-Loan Rate
House Republican leaders moved to seize the initiative for preventing college student-loan rates from doubling as they tried to blunt the political impact of President Barack Obama’s re-election pitch for the youth vote.
House Speaker John Boehner announced that the Republican- controlled House will vote tomorrow on legislation to extend for another year the 3.4 percent rate that students pay on government education loans. Unless Congress acts by July 1, the rate will rise to 6.8 percent. Senate Democrats and Republicans are offering competing plans for freezing the interest rates.
Boehner unveiled the Republican legislation as Obama took his campaign this week to campuses in three battleground states: the University of North Carolina, the University of Colorado and the University of Iowa. The Democratic president also appeared on NBC’s “Late Night with Jimmy Fallon” to promote his plan.
Boehner, an Ohio Republican, said today that Obama’s campaign should reimburse the Treasury for his trips to create a “fake fight” over student loans. Both parties knew the interest-rate increase “wasn’t going to take effect,” the speaker said.
Obama and Mitt Romney, who declared himself the Republican presidential nominee after sweeping five primary contests on April 24, are vying for the youth vote in a race that pollsters project will be close in the November election.
Unemployed or Underemployed
The former Massachusetts governor joined Obama in urging lawmakers to freeze interest rates students pay for the government loans while blaming him for an economy in which “50 percent of recent college graduates are unemployed or underemployed.”
Senate Democrats and the White House are seeking a one-year freeze in the interest rate. The $6 billion cost would be offset by limiting a tax provision that allows some owners of so-called S-corporations to avoid paying Medicare payroll taxes on their earnings, Senator Tom Harkin, an Iowa Democrat, told reporters.
The 50-year-old president told students in Iowa City, Iowa, yesterday that he and first lady Michelle Obama were paying off student loans as recently as eight years ago. “We’ve been in your shoes,” he said at the University of Iowa. “We can’t price the middle class out of an education.”
Senate Majority Leader Harry Reid, a Nevada Democrat, plans to introduce a bill modeled on Obama’s rate-freeze plan. A Senate Democratic leadership aide said the student loan legislation will come up for a vote in May after the Senate returns from next week’s recess.
Boehner made his announcement outside his office at a press conference that was called 10 minutes before he appeared at the podium.
Seven Years of College
“I know this issue well,” Boehner said. “It took me seven years to work my way through college, working every job I could get my hands on.”
Boehner said the $6 billion cost of preserving the 3.4 percent rate for another year would be financed under his proposal from a disease prevention and public-health fund in the health-care overhaul law Congress passed in 2010 when Democrats were in the majority.
Boehner derided that source as one of the “slush funds” in the health-care measure. The Republican bill would rescind the remaining $11.9 billion from the fund and use $5.9 billion to freeze loan interest rates for a year. The rest would be used for deficit reduction.
House Minority Leader Nancy Pelosi told reporters today that Democrats will urge their members to vote against the Republican student-loan measure because it would be financed by eliminating child-immunizations, cervical cancer screenings and other disease prevention programs.
Republicans would pay for freezing the interest rate by waging “another assault on women’s health,” said Pelosi of California.
Boehner said politicians in Washington shouldn’t be “exploiting the challenges that young Americans face for political gain.”
Boehner rejected a reporter’s suggestion that he was joining Obama to try to get the youth vote. “Please, this issue is not a partisan issue” because “no one here expected that interest rates were going to go up in July,” he said. The bill is H.R. 4628.
To contact the editor responsible for this story: Jodi Schneider at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.