Keep student loan rates low, Republicans say in address
June 8th, 2013
06:00 AM ET
9 years ago

Keep student loan rates low, Republicans say in address

(CNN) – With less than a month to go before rates jump on some student loans, Republicans are returning pressure from the White House on whose plan is better to avert the spike.

Rep. Luke Messer, R-Indiana, accused President Barack Obama in the weekly Republican address of rejecting a House Republican plan on political grounds, saying the president himself had proposed a similar measure in his annual budget.

“His maneuvers are yet another example of the arrogance of power that has taken root in this administration, and it prevents us from addressing the people’s priorities,” Messer said.

In a Rose Garden event last week, Obama urged students and recent grads to apply pressure on congressional Republicans to adopt his own plan to avoid the rate increase.

But Republicans argue that Obama basically agrees with their approach, which would tie the student loan rate to economic factors instead of leaving it up to Congress.

“Taking the politics out of student loans is a commonsense fix. It’s a plan that mirrors a proposal in President Obama’s budget,” Messer said Saturday.
“Unfortunately, rather than seize this common ground and move the ball forward, the president resorted to campaign-style tactics, stepped out into the Rose Garden, and denounced the plan,” he added.

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 his event last week, 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.

CNN's Kevin Liptak and Tom Cohen contributed to this report.

Filed under: Education • GOP
soundoff (23 Responses)
  1. Dan5404

    You can be sure that whatever the GOP proposes. the fine print helps the 1%, not the middle class.

    June 8, 2013 08:05 am at 8:05 am |
  2. eagerliving

    Obama needs to get away from this percentage-of-income stuff. A much better idea is to have a capped rate, and that way, as the student's income rises, they can CHOOSE whether to pay off the loan early, purchase something else, or put it in savings. This whole idea of "Oh, you have X income? Then you must pay Y amount for this" is complete BS.

    June 8, 2013 08:34 am at 8:34 am |
  3. Colorado

    Well of course the republicans support a program that maximises profits for the bankers. If you think these guys are on the side of young people you are fooling yourselves.

    June 8, 2013 08:37 am at 8:37 am |
  4. Gurgyl

    ---to grab VOTES??? Idiots.

    June 8, 2013 08:37 am at 8:37 am |
  5. Minnie Mouse

    Loan interests rates not only inflates the payments, it's a breaking point to whether a person can or cannot afford the payment in the end result of college. Forgiveness loans! These need to be tossed because when you borrow you pay back. It is what it is! To assist students, has anyone ever considered offering loan notes of , 5, 10, and 15 years??(just and example, more options than a 5 year note)

    Students need more options to get the payments that meets his or her college needs. This could be a career breaker for people if they cannot afford the education degree in the actual field that they really want to get into because they will be forced to take a less career paying field that really do not want but it's all they can afford.

    June 8, 2013 09:10 am at 9:10 am |
  6. Evergreen

    From the few details given in this article the plans do not "mirror" each other. This country needs a well educated workforce.

    June 8, 2013 09:14 am at 9:14 am |
  7. Thomas

    I think the President understands not only the importance of keeping student loans affordable , but the importance of paying off the loan .

    If it was up to the Greed of the GOP , the student loan program would look more like pay day lending !

    June 8, 2013 09:56 am at 9:56 am |
  8. Ray E. (Georgia)

    There are probably a lot of programs to help the student monitarily. Wasn't Student debt just in the news? It used to be that students worked their way thru college. That probably needs to be re-invented.

    June 8, 2013 11:28 am at 11:28 am |
  9. Larry L

    Allowing student loan rates to float until the student graduates would be like many of the variable interest rates mortgages – the cause of financial ruin for consumers and a method for the financial district to play games with the loans. If the loans were issued each year it's reasonable for that year's loan to rise or fall with the cost of loaning money – but should thereafter remain fixed throughout the life of that loan.

    June 8, 2013 11:58 am at 11:58 am |
  10. basedonfact

    They say this in their address while codifying higher rates in their legislation. The Ryan plan raises rates AND eliminates the grace period after graduation

    June 8, 2013 12:00 pm at 12:00 pm |
  11. rs

    If Republicans want low student loan rates, why are they filibustering the bill in the Senate?

    June 8, 2013 12:02 pm at 12:02 pm |
  12. rs

    Ray E. (Georgia)
    There are probably a lot of programs to help the student monitarily. Wasn't Student debt just in the news? It used to be that students worked their way thru college. That probably needs to be re-invented.
    No Ray, we just need to make the GOP Go away. Here in sunny, deep Red Arizona, where our Constitution states that State Higher Education "Should be as nearly free as possible" the GOP/TP controlled legislature has whittled away at funding State Universities. In 1990 or so, they funded about 88% of the total cost of higher education. Now they fund about 22%- which has driven tuition up dramatically. The Republicans have caused this problem, and now they are, once again filibustering the bill in the Senate that would fix student loan rates.
    Nope, just the GOP working against America- some more.

    June 8, 2013 12:06 pm at 12:06 pm |
  13. rs

    It used to be that students worked their way thru college. That probably needs to be re-invented.
    And where I am they still do- even at our state Univ. prices now run $10k a year. Our student workers work multiple part-time jobs. Nice that the GOP is keeping them underpaid by keeping the Minimum Wage artificially low, and defunding Work-Study funds.

    June 8, 2013 12:12 pm at 12:12 pm |
  14. Larry L

    Wealthy people don't use student loans so Republicans have very little interest in making those loans reasonable. However, Republicans do have a great deal of interest in keeping the fat-cats in the financial district happy and therefore support loans designed to place all risks on the student and the federal governmant.

    June 8, 2013 12:12 pm at 12:12 pm |
  15. Larry L

    @Ray E. (Georgia)

    There are probably a lot of programs to help the student monitarily. Wasn't Student debt just in the news? It used to be that students worked their way thru college. That probably needs to be re-invented.
    With college costs running over $25K per year it's hard to imagine a situation where a young person could "work their way through college". How many people WITH college degrees have an extra $2k per month? How many hours per week would a person need to work to earn that sort of income. When would they study or attend class? I guess they could take Romney's advice and "just borrow the money from their parents".

    June 8, 2013 12:17 pm at 12:17 pm |
  16. just sayin

    why is the federal government in the student loan business??? so the politicians can play games with our money to buy votes from the student loan holders? yes. this is the only reason obama had the government take them all back to the government. eventually they will for the government to forgive the loans entirely, sticking the taxpayers with a trillion dollar bill.

    how ironic is it that all the useful idiots that voted for obama can't find jobs in order to repay these loans. i guess this is their political payback. obama government corruption in action.

    June 8, 2013 12:30 pm at 12:30 pm |
  17. aaron

    Repubs would rather have the number of college graduates decrease, then they can scream lack of skilled workers in the U.S. and push through bills to allow their croonies to import cheaper foreign workers.

    June 8, 2013 01:28 pm at 1:28 pm |
  18. Data Driven

    A no-brainer. Obviously, locking in the rate would be better for the consumer. Any conservatives here actually believe that letting interest rates rise during a person's college years is a great idea?

    I was also amused to read a poster here suggest that students can "CHOOSE" to pay down the loan early. Yeah, right - if your name is Wellington Fancybritches the Third. Except that you'd be rich enough to not need a loan in the first place. Can we have some intellectual honesty in the debate, please?

    June 8, 2013 02:36 pm at 2:36 pm |
  19. Pete

    Don't you republicans remember when Pres.Obama wanted before the sequester kicked in to cut existing rates to under 2% and republicans screamed it was another government hand out,remember republicans I do!!

    June 8, 2013 02:46 pm at 2:46 pm |
  20. Pete

    Romney like most republicans in saying just go ask your parents for 20 gran for college like it was chump change,that's republicans thinking as well and do republicans do any real thinking!!

    June 8, 2013 02:49 pm at 2:49 pm |
  21. Gary

    And if the President agreed completley with the Republican plan they would have voted against it.

    June 8, 2013 02:57 pm at 2:57 pm |
  22. Bill from GA

    Ray E. (Georgia)
    " It used to be that students worked their way thru college."

    Not a bad idea, but the application is limited. The jobs available to most college students are low-paying, and college costs are outrageous. Many students DO work to help pay for college, and it makes a significant difference at relatively low-cost community colleges and tech schools. So it doesn't need to be reinvented; it never went away.

    The issue, which probably doesn't bother conservatives, is that college is a major tool that enables the wealthy to maintain an advantage, passing opportunity along to their children through a college education. With government help, the playing field may be more level. And the country, as a whole, benefits by allowing intelligent, hard-working young people to use their talents.

    College shouldn't be for everyone, but lack of wealthy parents should not keep good potential students from college.

    June 8, 2013 02:58 pm at 2:58 pm |

    The weak talk is cheap. They need to ACT to keep the rates low.

    June 8, 2013 03:14 pm at 3:14 pm |