GOP: Let’s Pay for Low Student-Loan Rates with ObamaCare Slush Fund
Republican leaders meet President Obama's interest-rate theatrics tour with extension legislation that easily finds the $6 billion needed.
April 25, 2012 - 4:00 pm
President Obama’s student-loan tour this week — jetting to North Carolina, Colorado, and Iowa — was a carefully scripted piece of political theater intended to hit on the youth vote, the economy, and education in one fell swoop while wrapping campaigning in an official-business package.
In North Carolina, he hit a conveniently placed Late Night with Jimmy Fallon set to make a few quips then talk about extending lower student-loan interest rates. In Boulder, he bought pizza at a beer dive and talked about not “pricing the middle class out of a college education.”
“We paid more for our student loans than we paid for our mortgage each month when we first bought our small condo in Chicago,” Obama told the University of Colorado crowd Tuesday night. “And we were lucky to land good jobs with a steady income, but we only finished paying off our student loans about eight years ago. Think about that.”
In Iowa, he sat down for a pooled press roundtable with five students — their extensive bios released by the White House in advance — who are receiving Stafford federal student loans.
While Obama may have been face to face with students, the intention was a face-off with Congress that would have been a nice jump-start to his summer campaigning. In 2007, Congress passed the College Cost Reduction and Access Act to lower interest rates on federal student loans from 6.8 percent to 3.4 percent, cuts that expire July 1.
It was perfect timing for Obama to go on the education stump while calling on Congress to pass an extension, for which Republican and Democratic bills had been lingering on the Hill.
But the second act belonged to congressional Republicans.
This afternoon, House Speaker John Boehner (R-Ohio) announced that the lower chamber will vote this Friday on a one-year extension — paid for by killing an ObamaCare slush fund.
“You know, this week the president’s traveling the country on the taxpayers’ dime, campaigning and trying to invent a fight where there isn’t one, and never has been one on this issue of student loans,” Boehner said at a press conference. “We can and will fix the problem without a bunch of campaign-style theatrics.”
Meeting Obama’s tale this week of how long it took to pay off his student loans, Boehner said it took him seven years to work his way through college, “working every job I could get my hands on.”
“And what Washington shouldn’t be doing is exploiting the challenges that young Americans face for political gain,” the speaker said. “And it shouldn’t be sticking small businesses with a health care law that’s…making it more difficult for them to hire workers.
“Let’s fix the problems for young Americans, and leave the campaign theatrics for the fall.”
In the upper chamber, 14 Republican senators including Minority Leader Mitch McConnell (R-Ky.) today put forth the Student Loan Interest Rate Reduction Act, which also extends the 3.4 percent rate for a year paid for with money from the health care law.
Sen. Lamar Alexander (R-Tenn.), introducing the bill on the Senate floor, noted that the Congressional Research Service found that the average benefit to students who get the lower rate is about $7 a month, and will cost taxpayers about $6 billion.
It would only affect new, subsidized Stafford loans.
“All this talk is about offering students the benefit of about $7 a month for new loans,” Alexander said. “It is important to notice that no student who has a 3.4-percent loan today will see his or her interest rate go up.”
Still, he said he was glad the president was bringing the student-loan issue to light so that Republicans can show how congressional Democrats “are actually overcharging students — all students — on student loans and using some of the money to pay for the health care law.”
“The Congressional Budget Office said when the new health care law passed, Congress took $61 billion of so-called savings — I call them profits on student loans — and it spent $10 billion to reduce the debt, $8.7 billion on the health care law, and the rest on Pell grants,” he said.
Alexander stressed that both sides of the aisle, Obama and Mitt Romney included, want to see student-loan rates remain low, but differ on how to pay for the extension.
“Our friends on the Democratic side have come up with their usual methods of paying for it: They are going to raise taxes on small business and people who create jobs,” the senator said. “We have a little better idea on this side, which is, let’s take the $8.7 billion back that the Federal Government overcharges students on student loans today to help pay for the health care law and give it back to the students, and let’s extend this for one year. That will leave nearly $3 billion extra, which we can use to shore up the Pell grant funding gap that is expected over the next couple of years.”
“Respectfully, I say to President Obama, when you visit the next college campus, tell the whole story,” Alexander added.
On Air Force One en route to Iowa today, White House press secretary Jay Carney was asked by a reporter if Democrats bear just as much responsibility to extend the rates, since it was that side of that aisle that built in the expiration date in the first place.
Carney said that he’d seen “a bit of the dam breaking in the last few days,” but the Republicans were still the major block.
“I saw some stray remark yesterday about someone suggesting that — a Republican suggesting that the president should stop talking about the student loan issue and focus instead on the economy,” Carney said. “And I was just stunned by how narrow-minded those remarks were because this is absolutely about our economy.”
The conservative Republican Study Committee released a fact sheet on student-loan rates today accusing the Obama administration of exacerbating the tough times for students, who are borrowing twice what they did just a decade ago.
“Government subsidized loans have helped fuel skyrocketing college tuition costs – much like Fannie Mae, Freddie Mac, and the housing bubble – leading many young people who now cannot find jobs to borrow even more money to complete their education,” the RSC said.
“Americans now have more student loan debt than credit card debt. What these folks don’t have are jobs.”