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November 24, 2014

Will Congress Heed Obama’s Call on Student Loans?

obama053113 445x321 Will Congress Heed Obamas Call on Student Loans?

Obama speaks on student loans Friday in the Rose Garden. (Mandel Ngan/AFP/Getty Images)

The House passed a bill the president doesn’t like. The president wants a bill on his desk. The onus, as has been typical in the past few years, is now on the Senate to act.

And as we previously reported, a vote on a Democratic alternative could come to the Senate as soon as next week as an amendment to the pending farm bill, or Senate Majority Leader Harry Reid, D-Nev., could bring the legislation to the floor as a stand-alone one. The decision on how to move forward likely will be made at the June 3 leaders meeting, per a Democratic source.

Reid announced Friday that the Senate would vote next week on what he termed “a common-sense proposal to prevent middle class families from being hit with a rate hike that could cost them thousands. The House Republican proposal is a non-starter in the Senate because it would leave middle-class families with the uncertainty of seeing their rates fluctuate wildly year to year, potentially having to pay thousands more from one year to the next.”

But given the GOP response to President Barack Obama’s Rose Garden speech on the student loan issue Friday, moving forward with a Democratic bill could violate Reid’s vow not to bring anything controversial to the floor that could compromise an immigration overhaul.

Republicans sharply criticized Obama’s decision to surround himself with college students Friday as well as his appraisal of the House bill. The president slammed the GOP effort, saying, “It fails to lock in low rates for students next year.” He added, “The House bill isn’t smart, and it’s not fair. I’m glad that the House is paying attention to it, but they didn’t do it in the right way.”

A sampling of the Republican reaction Friday:

Speaker John Boehner, R-Ohio:  “Last week, the House passed legislation that would prevent student loan rates from doubling and permanently take politics out of the issue. The bill already passed by the House provides a market-based variable interest rate, mirroring what the president proposed in his own budget. The differences between the House plan and the president’s are small, and there’s no reason they cannot be overcome quickly. But today, rather than working to resolve the issue, the president resorted to a campaign stunt to try to score political points. If the president is truly unhappy with inaction, the only place to look is the Democratic-run Senate, which has taken no action to prevent rates from doubling.”

“With time so short and the differences between our proposals so slight, today’s event was misguided and deeply disappointing. A president who promised young people he would reject petty partisanship, today practiced it himself. If he really wants to shield students from higher rates, he should work with his former colleagues in the Senate to act. That’s what our students deserve.”

Senate Minority Leader Mitch McConnell, R-Ky.: “With the President and Congressional Republicans in agreement on the need to provide a permanent reform to address the increase in interest rates on new student loans, no one should be fooled by today’s campaign-style event at the White House. House Republicans have already passed legislation that would prevent a rate hike, and Senate Republicans have proposed a solution similar to one the President himself called for in this year’s budget. Here’s one issue where the two parties can and should find quick agreement. Unfortunately, the President appears more interested in needlessly stoking partisan divisions in Washington than helping young Americans avoid a higher interest rate on their student loans.”

Sen. Lamar Alexander, R-Tenn., ranking member of the Health, Education, Labor and Pensions Committee: “Senate Republicans support a permanent solution that will reduce interest rates for 100 percent of new student loans, not a short-term political fix that reduces rates for 40 percent of new loans. This would be fair to students and fair to taxpayers. Since the House of Representatives has already passed a permanent solution that seems to be much like what the president and Senate Republicans support, Congress should be able to agree on it before July 1.”

Congress had a similar battle last summer over student loan rates, set to double at the beginning of July. And even Obama, channeling his inner Yogi Berra, remarked on how he felt like he’d been in this situation before. He made the case that the student loan bill is good for the economy and for lowering unemployment, while reinforcing the long-held position of the administration that the House bill is unacceptable and that savings from its changes to the loan rates should not be put down toward the debt.

“How do we make sure our workers earn the skills and education they need to do the jobs that companies are hiring for right now, and are going to keep hiring for in the future? We know that the surest path to the middle class is some form of higher education — a four-year degree, a community college degree, an advanced degree. You’re going to need more than just a high school education to succeed in this economy,” Obama said in his remarks. “Now, if this sounds like déjà vu all over again, that’s because it is. We went through this last summer … eventually, Congress listened to all the parents and young people who said ‘don’t double my rate.’ And because folks made their voices heard, Congress acted to keep interest rates low. But they only did it for a year and that year is almost up.”

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