President Obama returned to the subject of student loans Saturday in his radio address attacking Congress for refusing to act to keep student loans from doubling from 3.4 percent to 6.8 percent on July 1.
“This makes no sense,” Obama said. “We know that one of the most important things we can do for our economy is to make sure we make sure that all Americans get the best education possible.”
The president continued suggesting that failing to continue act will make it harder for Americans to enter the middle class, making no mention of the role that federal student loan guarantees have played in the runaway cost of college.
Obama also struck the theme in a speech on Thursday when he said over 7 million students would be hit with “the equivalent of a $1,000 tax hike” unless the House and Senate reach an agreement.
The Democratic Congressional Campaign Committee jumped behind Obama launching a website Studentloancountdown.com that attempts to pin the blame for the looming showdown on House Republicans.
Republicans offered a student-loan reduction plan that would have off-set the cost of continuing the 3.4 percent interest rate on certain federally backed student loans by offering cuts from what they term as an Obamacare “slush fund.” But Senate Democrats balked at the idea.
“This site launched by DCCC is political spin at its worst. It’s intended to deflect blame from President Obama who has yet again failed to demonstrate leadership in regards to student loans and remains in a perpetual state of campaigning,” College Republican National Committee Chairman Alex Schriver said in a statement. ”House and Senate Republicans have offered bills to keep interest rates low for student borrowers for another year. Remember, it was President Obama who vowed to veto the House bill.”
The student loan issue was one of the congressional Democrats’ own making back in Jan. 2007 when they wrote the sunset provision into the law. The Bush White House objected at the time pointing out that the student loan subsidies did nothing to reduce the immediate costs of a college education for low- to moderate-income families.
The Bush White House’s solution would have been to make federal grants available to eligible students to make the cost of college more affordable to those then currently attending college.
House Budget Committee Chairman Paul Ryan’s (R-Wisc.) budgetary blueprint made a similar point noting that federal student loan subsidies encourage colleges and universities to increase their tuition.
And the American Enterprise Institute points out that keeping student loan interest rates immune from market forces has only contributed to college costs increasing faster than health care.