With slightly more than a week left before student loan rates double for millions of Americans on July 1, President Obama on Thursday urged students and their parents to continue to press for congressional action.
It was the second time in as many weeks that Obama, facing off again with House Republicans, used his bully pulpit to press for a resolution of the dispute over how to pay for an extension of lower loan rates for another year.
“This issue didn’t come out of nowhere. It’s been looming for months. But we’ve been stuck watching Congress play chicken with another deadline,” Obama said in a brief East Room statement before a group of students. “I understand that members of both parties say they want to get this done and there are conversations taking place, but they haven’t done it yet. And we’ve got to keep the pressure on.”
“Keep telling Congress to do what’s right to get this done,” he said.
On Capitol Hill, GOP leaders complain that Obama’s public remarks are at odds with his administration’s refusal to engage in serious negotiations on how to pay for $6 billion in subsidies for the federal Stafford loans. Republicans say that they are ready to make a deal and have offered proposals to Democrats but that the White House has blown them off in favor of Obama’s making public speeches.
Both the administration and Republican leaders want to freeze interest at 3.4 percent and avoid a doubling of the rate to 6.8 percent, which would increase the average cost by $1,000 per student over the life of the loan. But the two sides remain deadlocked over how to pay for the plan.
The rate increase would affect an estimated 7.4 million people.
On the Senate floor, Minority Leader Mitch McConnell (R-Ky.) said Obama has been “missing in action” in talks to resolve the impasse, and he said the president had put forward no concrete proposal for keeping loan rates low.
“For the president, this is just another sad example of his election year strategy of deflection and distraction,” he said. “We’ve proposed multiple, multiple good-faith solutions. . . . It’s time to stop the games. It’s time for the president to act.”
White House press secretary Jay Carney rejected McConnell’s contention that the White House has not engaged with Congress on negotiations.
“That’s simply not true. We are actively working with members of Congress to get this done, absolutely, in both parties,” Carney said. He said he thought progress had been made toward an agreement on paying for the initiative.
“In the end, we will get this done,” he said.
Pressed by reporters, however, Carney could not name Republican lawmakers with whom Obama has been negotiating.
Two weeks ago, Obama spoke to students at the University of Nevada at Las Vegas and prodded Congress to approve the student loan legislation. Obama has tied college affordability to a reelection message built around a growing middle class, and he has heavily targeted the sort of young people who helped power his campaign four years ago but have grown disillusioned as the economy has sputtered.
“The number one thing Congress should do for you, UNLV, right now, is to stop interest rates on student loans from doubling at the end of the month,” Obama said to applause. “The clock is running out. You know, in today’s economy, higher education can’t be a luxury. It’s an economic necessity. Everybody should be able to afford it.”
White House officials have pointed to student loans as an issue on which they hope a deal can be reached with congressional Republicans in an increasingly partisan election year.
On the Hill, Democrats and Republicans spent the past week blaming each other for the impasse over how to pay for freezing rates. But some negotiations toward resolving the issue have been underway as part of a broader discussion of a two-year $109 billion highway funding bill.
Senate Majority Leader Harry M. Reid (D-Nev.) has proposed funding the loan rate freeze by raising premiums companies pay for federal pension insurance. The idea is thought to be acceptable to businesses, provided that changes to rules for calculating pension liabilities are also approved. Reid’s proposal could link the resolution of the two issues, among the trickiest likely to face Congress before the November elections.
In the House, GOP leaders have insisted that they passed a bill that would keep student loan rates low and that it is up to Senate Democratic leaders and the president to find a solution. The House bill would have paid for the rate freeze by slashing funding for a preventive health-care fund created in Obama’s health-care law, a trade-off unacceptable to Democrats.
Michael Steel, a spokesman for House Speaker John A. Boehner (R-Ohio), adapting a line from a hit pop song Thursday, said: “House Republicans have acted to stop the student loan rate hike. If the president wants to make progress on student loans, could he call Senator Reid, maybe?”