Higher Student-Loan Interest Rates Could Have Political Costs
"Senate Democrats... find themselves on the defensive, forced to explain their inaction on an issue that just last year helped the party win the student vote," The Chronicle of Higher Education reports. "With the Fourth of July recess set to begin on Monday, Democrats are heading home to constituents who are angry over the increase, and who may blame their senators for the impasse. Republicans in the House of Representatives recognize this, and have been using every opportunity to point out that they have passed a bill on student-loan interest rates that is similar to President Obama's proposal. They've devoted their last three weekly radio addresses to student loans, and have issued a flurry of news releases accusing Democrats of blocking the president's plan. Last week the speaker of the House wrote to Mr. Obama, urging him to show leadership on the issue. 'It is astonishing that your fellow Democrats have been so openly hostile to your proposal,' Rep. John A. Boehner, an Ohio Republican, wrote. 'Frankly, there is no evidence that Democrats are making a sincere effort to get a bill passed.' Democrats counter that no fix would be better than the Republican plans, which would allow rates to rise above 6.8 percent—the mark they will hit, barring a last-minute breakthrough, on Monday. Along with student groups, they're pushing for a short-term extension of the current rate, arguing that Congress needs time to take a comprehensive look at the federal loan programs. It's still possible that Congress could come to an 11th-hour consensus on student loans. But with the president on a weeklong visit to Africa, and many lawmakers leaving town for their home states and districts, the chances for a deal are 'slim to none,' said Justin Draeger, president of the National Association of Student Financial Aid Administrators. He pointed out that while Congress has a history of staving off crises at the last minute, its recent track record hasn't been that great: Just look at sequestration, the across-the-board budget cuts that took effect in March, despite Congress's efforts to avert them.With only a few days remaining before the interest-rate increase is scheduled to take effect, Mr. Draeger is advising his group's members to tell student borrowers that their rates are doubling to 6.8 percent."
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