THE HILL. APRIL 22, 2013. Congress is headed for another showdown on student loans.
With just over nine weeks to go before rates hike, Congress seems nowhere close to finding a solution to stop student loan rates doubling from 3.4 percent to 6.8 percent on July 1.
Rep. Joe Courtney (D-Conn.) told The Hill that there isn’t enough time to get a long-term fix at this stage and expects any solution to come at the last minute.
“If you look at last year … It got dealt with at the end. It took a while for the political temperature to boil," Courtney said.
Democrats captured the upper hand on student loans in 2012 as the White House went on the offensive, forcing Republicans in Congress to cave during the intense election year.
Tiffany Loftin, president of the United States Student Association (USSA), said, “It’s unfortunate that we’re going around this again.”
Courtney, a member of the Education and the Workforce Committee has legislation that would extend the current rate of 3.4% for two years to give Congress more time to properly address the issue.
USSA, which has 4 million members in 12 states, said it’s willing to support the Courtney proposal in the short term if nothing else is done.
“Absolutely … we want to make sure we’re making this as affordable as possible."
USSA is pushing for a bill introduced in March by California Democrat Karen Bass that would make the current rate of 3.4 percent permanent. Its prospects in the Republican-controlled House are remote.
President Obama does not support the Bass bill. Instead, he called for a market-based rate proposal in his new budget.
House Education and Workforce Committee Chairman John Kline (R-Minn.) welcomed the president’s proposal earlier this month, but stopped short of fully endorsing it.
“My Republican colleagues and I have long believed returning to a market-based system for determining interest rates just makes sense and will provide more stability for borrowers. However, the devil is in the details, “ said Kline.
Loftin described the president’s proposal as “not good,” but added, “I’m excited that the president came out to lower interest rates.”
Loftin said students are worried by the variable rate. “Matching up to the market rate is scary for us … we want some sort of cap.”
USSA is planning an education campaign in the next week on college campuses alerting students to the looming increase on July 1.
Education Secretary Arne Duncan recently expressed optimism that a deal will be struck, as did Republican senators. But Democratic senators have been more skeptical, according to an article on InsideHigherEd.com.