(CNN) – With about a week to go before interest rates jump on certain types of student loans, Republicans are again calling on the White House and Senate Democrats to approve a plan that would avert the spike.
On July 1, rates will almost double on nonsubsidized Stafford loans given to college undergraduates unless Congress works to avoid the jump. Obama has applied pressure on Republicans to adopt his own plan to avoid the rate increase, but Republicans argue Obama basically agrees with their approach, which would tie the student loan rate to economic factors instead of leaving it up to Congress.
"Senate Democrats have actively blocked the president's plan and refuse to consider ours," Rep. John Kline on Minnesota said in Saturday's Republican weekly address. "In fact, they have yet to pass a solution of any kind. If I didn't know any better, I would say they are content to let rates double."
Differences between the two sides involve when the rate on a loan gets locked in, with Obama calling for it to happen right away while the House measure would allow it to rise until a student graduates.
Another difference concerns maximum rates.
The House measure would cap interest rates at 8.5% for student loans while the Obama proposal would contain no such cap but would include a program to limit a former student's annual expenditures on the loan to no more than 10% of discretionary income.
In an event earlier this month, Obama criticized the House GOP proposal as "not smart" and "not fair," saying it would increase the burden on middle- and lower-income families to pay for a college education.
As the deadline approaches for the lower rates to be extended, lawmakers are ramping up the effort to strike a deal. Kline said in his address "there are finally signs of progress," but noted the last-minute clambering was no way to do business in Washington.
"This 11th-hour scrambling is a perfect demonstration of why we need to take the politics out of student loans once and for all," he said. "We should now seize the opportunity before us. I urge President Obama to get engaged so we can stop this rate hike and deliver the kind of long-term solution our students and their families deserve."
GOP drama to grab you vote just like any other third world nation!!!! Pathetic.
The rates do need to be kept low and can be kept low. There's not enough options for people who are having to front all the funds for college tution. Not everyone has wealthy parents, is qualified for pell grants or recieves scholarships.
This leaves millions to fend for themselves in order to better his or her future.i They should remain low and be evaluated every few years and ave the loans drawn out on longer terms. It's a win, win situation for everyone because students will get the payment that is affordable for them and you will gain all of the interests by extending the loan terms. The interest needs to be at a flat set rate and everyone needs to be charged the same tuition
Actually, the government has to get out of, the student loan business. Every student in America is turning to government financing, which is simply impossible to support.
The choice appears to be between the President wanting a fixed rate student loan and the Republicans wanting an adjustable rate student loan.
July 1st is next week .
Keep student loans low and affordable .
Both democrats and republicans are under presser to privatize student lending . Big money to be made , the last scenario this country needs is the kind of predatory lending such as payday lending for education.
I trust the President on this one. He had student loans to get through college , and most of all he paid them back.