Student Loan Standoff, Finger Pointing, Continues

Student Loan Deal Taking Shape on Capitol Hill

Jun 262012

Alex Wong/Getty Images(WASHINGTON) — Congress is starting to see some light at the end of the student loan impasse tunnel.

Both the Democratic and Republican leaders in the Senate Tuesday announced that a deal is almost complete to avoid student loan rates from doubling on July 1. The deal, which both Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., announced Friday, is contingent on the House Republican leadership getting their members on board.

“We are moving toward completion this week of both the extension of the student loan rates at the current level for another year,” McConnell said Tuesday after his party’s weekly lunch. “Senator Reid and I have an understanding that I think would be acceptable to the House.”

Reid said he too believes they’ve come together and are at a “good place” with a deal but that the final details, which neither side was willing to divulge yet, would have to come together by Wednesday.

“We basically have the student loan issue worked out,” Reid said. “The next question is, what do we put it on to make sure we can complete it? There are a number of suspects we have, but right now we don’t have that worked out yet. ”

The student loan deal may be coupled legislatively with the highway bill extension, which negotiators intimated might be the more efficient way to pass the deal, avoiding numerous votes and passing both with one fell swoop.

“We’re very close to having everything done,” Reid added. “But until we get everything done, nothing’s done. There’s been a lot of progress made. I appreciate the House Republicans working so well, and I know we can pass a bill. But, as I told my caucus, everyone has to be very, very patient now, and wait and see how the process works out. ”

Both Republicans and Democrats have long believed the subsidized Stafford loan rates should not be doubled from the current 3.4 percent to 6.8 percent and agreed the current rates should be extended for at least another year. But getting both sides to agree on how to pay for the bill was the source of disagreement.

The nuts and bolts of the deal are still being worked out, both sides said, so they would not yet reveal the details of the compromise.

Obama, GOP Clash over Student Loans

Jun 222012

JupiterImages/Comstock Images(WASHINGTON) — President Obama on Thursday demanded that lawmakers act to prevent interest rates on student loans from doubling on July 1, saying it was “mind-boggling” that the stalemate has lasted this long.

“This should be a no-brainer. It should not be difficult. It should have gotten done weeks ago,” the president told students, parents and educators at the White House. “There’s still 10 days for Congress to do the right thing. I understand that members of both parties say they want to get this done and there are conversations taking place, but they haven’t done it yet. And we’ve got to keep the pressure on.”

Both Republicans and Democrats believe the subsidized Stafford loan rates should not be doubled from the current 3.4 percent to 6.8 percent and agree the current rates should be extended for at least another year. But the sides cannot agree to how to pay for the $6 billion bill.

Democrats propose raising the Medicare and Social Security payroll taxes on high-earning stockholders of some privately owned companies. Republicans oppose the measure.

Republicans propose getting rid of a preventative health fund that was created in the health care bill. Democrats oppose that and the proposal has no chance of getting though a Democratically-controlled Senate.

On Thursday, the president accused Republicans of stalling.

“Congress has had the time to fix this for months. That’s part of the reason why everybody here looks impatient,” Obama said to laughter from the audience in the East Room. “This issue didn’t come out of nowhere. It’s been looming for months. But we’ve been stuck watching Congress play chicken with another deadline.”

Republicans, however, claim they have been trying to solve the issue but that the president prefers to play politics.

“This is just another sad example of his election-year strategy of deflection and distraction,” Senate Minority Leader Mitch McConnell, R-Ky., said on Thursday.

The Senate has failed at passing both Democratic and Republican proposals. The House of Representatives has passed its plan, but the Democratically-controlled Senate has not taken it up, and it wouldn’t stand a chance of passing the Senate.

GOP leaders outlined their proposals to pay for the bill’s estimated $6 billion price tag earlier this month based on savings the president included in his budget plan, but say the White House never responded.

“We’ve reached out to the president,” McConnell said. “We’ve proposed multiple good-faith solutions. The only reason this issue isn’t already resolved — the only reason — is that the president wants to keep it alive. He thinks it benefits him politically for college students to believe we’re the problem. It’s time to stop the games. It’s time for the president to act.”

Senate Majority Leader Reid, D-Nev., on Thursday said while Congress is “not there yet,” he’s confident that they’re down the right road on the bill and can make progress before the July 1 deadline. He insisted that over the last two days there have been meetings that have given him this hope.

Obama Slams Congress for Failing to Act on Student Loans

Jun 072012

KIM JAE-HWAN/AFP/Getty Images(LAS VEGAS) — Touting his efforts to make college more affordable, President Obama Thursday blasted lawmakers for failing to extend low-rate student loans.

“This is a no-brainer,” the president told students at a campaign-style rally at the University of Nevada, Las Vegas. “I’ve just said to Congress: Get this done. Get it done…this is not complicated.”

Thursday’s event was the latest in the president’s push to boost support among young voters and contrast his education policies with those of congressional Republicans and presumptive GOP nominee Mitt Romney.

Both the administration and Republican lawmakers want to prevent interest rates on a popular student loan from doubling at the end of the month, but remain deadlocked over how to pay for it.

Thursday, the president accused Republicans of stalling on the legislation and urged them to “get to work” and extend the low rates.

“The number one thing Congress should do for you…right now, is to stop interest rates from student loans from doubling at the end of the month,” he said to applause. “The clock is running out. You know, in today’s economy, higher education can’t be a luxury. It’s an economic necessity. Everybody should be able to afford it.”

Republicans, however, have launched their own offensive, accusing the president of playing politics with the issue and urging him to come back to Washington to “work with us” on a solution.

Senate Minority Leader Mitch McConnell Thursday charged the president with using “students as props in yet another speech calling on Congress to act.”

“What the president won’t tell these students is that the House has already acted and that Republicans in both chambers are ready to work on solutions as soon as the president can take the time,” he said on the Senate floor ahead of the president’s speech. “All the president has to do is to pick up his mail, choose one of the bipartisan proposals we laid out in a letter to him last week, proposals he’s already shown that he supports.”

GOP leaders outlined their proposals to pay for the bill’s estimated $6 billion price tag in their letter, but say the White House has not responded to their plan.

Late Thursday Senate Majority Leader Harry Reid, D-Nev., counter-offered the GOP proposals, and his letter was initially well-received by Republican leadership.

The president’s speech at UNLV Thursday marked his only “official event” during a two-day trip to California and Nevada that included five fundraisers and brought in over $5 million for his campaign coffers.

“Of all the thinly veiled campaign events the president has held this year, this one takes the cake,” a spokesman for House Speaker John Boehner said. “The president has three common-ground options to resolve this issue sitting on his desk, but he’s deliberately ignoring them to justify this taxpayer-funded rally. It’s truly remarkable.”

Small Signs of Progress Show in Student Loan Impasse

Jun 072012

Alex Wong/Getty Images(WASHINGTON) — Is progress being made in the student loan impasse? Perhaps a little.

Late Thursday Senate Majority Leader Harry Reid, D-Nev., counter-offered two proposals of his own to pay for the one-year extension of student loans rates to prevent them from doubling on July 1.

And in a sign of tiny steps of progress, the letter was initially well-received by Republican leadership.

Reid proposes a combination of two ideas to pay for the extension, changing and allowing more flexibility to employers pension insurance premiums, which would garner about $9.5 billion, and changing contributions to Pension Benefit Guarantee Corporation premiums, which would raise about $8 billion.

“The combination of these two proposals will provide sufficient resources to fund both a one-year extension of the current student loan interest rate and reauthorization of the nation’s surface transportation programs,” Reid writes in a letter sent to House Republican leaders Thursday. “My preference would be to use the funds raised by these two proposals to pay for both measures, and pass them immediately — since, as you know, both are critical to the economic security of middle class families, and both must be addressed before the end of June.”

Republican aides say they are still waiting for a response from the White House on their own proposals, sent last week, but received Reid’s proposals Thursday positively, indicating that they believe they “may be making progress.”

“We are encouraged to see the majority leader drop his insistence on taxing job creators,” Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, said Thursday. “We will review these new proposals and hope that they will finally review the bipartisan proposals we sent a week ago. But bottom line, now that Democrats are willing to take this issue seriously, and not just use students as props, we may be making progress.”

Both Republicans and Democrats believe the subsidized Stafford loan rates should not be doubled this July from the current 3.4 percent to 6.8 percent and agree the current rates should be extended for at least another year. But both sides thus far have not agreed on how to pay for the $6 billion bill.

Student Loan Standoff, Finger Pointing, Continues

Jun 052012

ABC News(WASHINGTON) — The Senate Minority Leader declared it is the White House, not Congress, that is preventing an agreement to avoid the student loan rates from doubling in July.

As Vice President Joe Biden sits down Tuesday with college presidents to urge Congress to stop the student loan interest rate from doubling next month, Sen. Mitch McConnell, R-Kentucky, called out the White House for using “props” in an “elaborate farce the White House political team cooked up on this issue.”

Both Republicans and Democrats believe the subsidized Stafford loan rates should not be doubled this July from the current 3.4 percent to 6.8 percent and agree the current rates should be extended for at least another year.

But both sides cannot agree to how to pay for the $6 billion bill.

House Republicans have already passed a proposal that would offset federal spending needed to keep student rates low by taking money from a fund to provide preventive care through the president’s health reform law. Democrats rejected that proposal.

Last month in the Senate both the Democratic and Republican versions failed in a last-minute, and half-hearted, attempt to pass a bill.

“The administration’s approach to this problem, it’s really nothing short of surreal,” McConnell declared from the floor of the senate Tuesday morning. “The only people dragging their feet on this issue are over at the White House itself. Republicans in Congress have been crystal clear for weeks; we’re ready to resolve the issue, to give students the certainty they need about their loan payments.”

The Vice President, Education Secretary Arne Duncan and CFPB Director Richard Cordray met Tuesday with a group of college presidents to reassert the call for Congress to stop the student loan interest rate from doubling.

On Thursday of last week House Speaker John Boehner, McConnell, House Majority Leader Eric Cantor and Senate Republican Whip Jon Kyl sent a letter to President Obama outlining some new proposals – including raising contributions to retirement programs for federal workers – to pay for the bill. McConnell said Tuesday they are still waiting for a response.

A Senate Democratic aide says they continue to be open to discussions with Republicans and this issue will come up again in the Senate before the expiration date July 1.

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