(WASHINGTON) — At a Rose Garden event surrounded by students on Friday, President Obama pressured Congress to prevent student loans from doubling from 3.4 percent to 6.8 percent on July 1, and he slammed the House Republican’s proposal as “not smart.”
“We know that the surest path to the middle class is some form of higher education,” Obama said. “Earning their degree isn’t just the best investment they can make for their future, it’s the best investment they can make in America’s future.”
“We can’t keep saddling young people with more and more debt, just as they’re starting out in life,” he said.
Congressional Republicans scolded Obama for hosting a “campaign-style” event after House Republicans passed a bill last week to put in place a new plan for calculating student loan interest rates.
“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,” said Senate Minority Leader Mitch McConnell, R-Ky., in a statement Friday. “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.”
But Obama said that though he’s “glad the House is paying attention to it,” their bill to address student loan interest rates “isn’t smart.”
“It fails to lock in low rates for students next year. That’s not smart. It eliminates safeguards for lower-income families. That’s not fair,” the president said. “It could actually cost a freshman starting school this fall more over the next four years that if we did nothing at all.”
The event hopes to reproduce some of the public pressure Democrats were able to gin up last year when Congress faced an identical deadline. Then, Congress voted to temporarily extend the 3.4 percent interest rates for a year, which has prompted a second standoff.
“If this feels like déjà vu all over again, that’s because it is,” Obama said, exhorting young people to call, email or tweet their representatives about the issue. “You made something bipartisan happen in this town; that’s a powerful thing.”
Just a month remains for Congress to prevent student loans from doubling on July 1, and both sides are still relatively far apart on a solution. There is one common thread tying the two sides together: everyone seems to acknowledge that financing an education can’t stay cheap forever.
The dueling proposals in Congress and from the White House — even the ones that preserve the status quo in the short term — all acknowledge that the 3.4 percent interest rates on federally subsided student loans will probably have to go up. The question now becomes when and how.
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