WASHINGTON, D.C. | June 7, 2013
It wasn’t long ago the president supported a permanent solution to the student loan interest rate crisis. Here is how the administration described the president’s plan in April of this year:
The Administration’s FY 2014 Budget proposes to change the structure of interest rates on Federal student and parent loans to provide market-based rates tied to the 10-year Treasury note with specified basis point add-ons for each type of loan… Put together, the Administration’s proposal to change the student loan interest rate structure and extend the Pay As You Earn repayment plan to all qualified student borrowers is budget cost neutral and, thereby, provides a long-term, sustainable solution to ensure students have the certainty they need to plan for the cost of attending college in a fiscally-responsible manner. (Department of Education, Fiscal Year 2014 Budget Proposal, Student Loan Reform Proposals)
That is why in May the House passed a bill mirroring the president’s request for a long-term, market based solution. Despite strong support by House Republicans, the president’s plan has hit a wall in the Democrat-led Senate. Here’s why:
[T]he prospects for compromise are muddled beyond the usual partisan gridlock. A chief reason is that President Obama’s position differs from the stance of many congressional Democrats. He wants a significant overhaul of federal lending; his usual Democratic allies on Capitol Hill want to freeze rates while continuing the debate. (Nick Anderson, “Senate deadlocks on student loans,” Washington Post, 06/06/13)
So naturally the president is urging his friends in the Senate to join him and House Republicans in pursuit of a long-term solution, right? Wrong. Rather than lead his party and rally support for his own plan, a policy statement released by the White House makes it clear the president is caving to the political maneuvering of Senate Democrats. As the House Education and the Workforce Committee noted:
The approach now supported by the president would ensure millions of borrowers will face another interest rate cliff in two short years – exacerbating the confusion and uncertainty facing families and students.
A budget is supposed to outline for the American people a president’s priorities. When faced with an opportunity to advance a bipartisan achievement, it seems this president’s real priorities are picking political fights and encouraging partisan gridlock.
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