Political fight over student loans heats up
May 31st, 2012
05:54 PM ET
11 years ago

Political fight over student loans heats up

Washington (CNN) – The political battle over legislation to reduce the costs of student loans ramped up Thursday.

Democrats accused Republicans of walking away from an issue critical to middle-class Americans just as Republicans proposed several specific options to offset the billions of dollars needed to extend lower interest rates for another year.

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First, top Democrats seized on news reports that House Speaker John Boehner told his members he didn't think a deal could be reached before the July 1 deadline when reduced interest rates on Stafford loans are set to expire and the interest rate will double to 6.8%.

In a closed session with House Republicans, Boehner blamed the stand-off on President Obama who Boehner said wants to "fabricate fights on things like student loans because he's out of ideas; he doesn't want to talk about his record or his failed policies," a GOP source told CNN.

As evidence of his desire to keep the rates down, Boehner said if the interest rate expires, he would push new legislation to lower the rates retroactively.

A doubtful Sen. Chuck Schumer of New York fired back. The Senate Democrats' top political messenger said the news reports "confirm our suspicions that Republicans were never serious about wanting to stop rates from doubling on college students. To many on the hard right, government should not play a role in helping students afford college. Speaker Boehner seems to be following their lead and throwing in the towel on this issue a month before the deadline."

Schumer said it seemed Boehner "would rather let costs rise on middle-class families that work across the aisle to find a bipartisan solution."

Just over an hour after Schumer issued that statement, the top four House and Senate Republicans released a letter they sent to the president outlining several funding measures to extend the lower rates.

"There is no reason we cannot quickly and in a bipartisan manner enact fiscally responsible legislation," they said in their letter.

Signed by Boehner, House Majority Leader Eric Cantor of Virginia, Senate Minority Leader Mitch McConnell of Kentucky and Senate Republican Whip Jon Kyl of Arizona, the letter presented options for offsetting the nearly $6 billion cost of the bill. They said they drew their ideas from the budget request the president submitted to Congress for 2013. The ideas include: requiring federal employees to contribute more to their retirement programs; limiting the amount of time students get for an in-school interest subsidy; revising a Medicaid provider's tax; and preventing overpayments by Social Security.

The House and Senate each have already passed an extension of the lower interest but they did with different cost offsets. The letter to the president was an effort to kick start talks to merge the two bills, a Senate GOP leadership aide explained.

There was no immediate response from Senate Democrats or the White House on the Republican proposals.

Drew Hammill, a spokesman for House Minority Leader Nancy Pelosi, said the letter was "a complete and utter ruse."

"In the privacy of his Republican Conference meeting this morning, the Speaker said that he will abandon efforts to prevent student loan interest rates from doubling by July 1st,” Hammill wrote. “This letter is nothing more than a damage control effort to try to hide the disdain the House Republican leadership continues to show for the millions of American students who are struggling to afford to pay for college."

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Filed under: Congress • Education
soundoff (13 Responses)
  1. Larry L

    This one is easy... The top 1% don't need student loans to send their kids to exclusive private colleges – so the Republicans won't support the program. Same goes for Medicare and Social Security.

    May 31, 2012 05:57 pm at 5:57 pm |
  2. Wire Palladin, S. F.

    Boehner will always be remembered as the worst speaker in the history of the house.

    May 31, 2012 06:30 pm at 6:30 pm |
  3. joe smith

    interest rates on student loans should be aligned to the rate banks give you on your passbook savings, ( generally .35% ), moreover, students whose repayment has been 70% satisfactory over a 10 year period..their remaining balance needs to be forgiven..the new found money entering the market place, in itself will jump start the economy..the future of the Nation is overwhelmingly at stake here..do the right thing for once..

    May 31, 2012 07:34 pm at 7:34 pm |
  4. joe smith

    looks like one response to me..

    May 31, 2012 07:52 pm at 7:52 pm |
  5. joe smith

    now I know how Ron Paul feels..no love..

    May 31, 2012 07:53 pm at 7:53 pm |
  6. Tubby the Tuba Texas

    What a cruddy Party....the Repuglicans! Don't want to help the youth, or the poor, or the Middle Class, or women, or blacks, or hispanics....only White Rich people!!

    May 31, 2012 08:08 pm at 8:08 pm |
  7. Chris

    Boehner has come out and said if that if student loans go up, he's banking on the public blaming the Democrats for it. So, once again, the Republicans are obstructing and deliberately sabotaging anything to help the American people just to score political points for themselves.

    May 31, 2012 08:10 pm at 8:10 pm |
  8. Sydnium S. Washington

    May the GOP take over the Congress.

    May 31, 2012 08:24 pm at 8:24 pm |
  9. Dejavu65

    Can't believe middle class America would even consider voting for Rich Repubs who care nothing about the middle class. Because they are Rich they want to just sit there and let students loans rates rise to 6.8% so they can then try to blame this on Obama before re-election. The Repubs don't even care how this will affect millions of American and our children...This is sad... Boehner is lying when he says nothing can be done by July 1.. That is plenty of time to fix the situation...Its sad cause these Repubs wont even represent the very people who voted for them .. not all Repubs are Rich!!

    May 31, 2012 08:28 pm at 8:28 pm |
  10. S.B. Stein E.B. NJ

    Why is it so hard for Boehner to accept some raising of taxes on the hire income people? It is the students that need the loans that don't have the money. If these wealthy really had some level of charity then they would funding some charitable college scholarship program so these kids wouldn't need loans.

    May 31, 2012 09:52 pm at 9:52 pm |
  11. Thomas

    The GOP needs to grow up , stop obstructing our future !

    June 1, 2012 04:17 am at 4:17 am |
  12. J.V.Hodgson

    There is only one real solution here
    Pass legislation to keep Student loan costs to 3.4% with a rider that funding must be agreed as a budget amendment and its reconciliation process within 1 month after the current deadline expires, you could even write in no funding via increased taxes or changes to the affordable care act.... that would force a bi partisan solution that might work well.

    June 1, 2012 04:39 am at 4:39 am |

    The GOBP don't want to merge the bills. Bankers and Big Oil are the only people the government can help,not those college peons.

    June 1, 2012 05:45 am at 5:45 am |