Student Loan Standoff Continues and So Does Finger Pointing

Jun 5, 2012 2:27pm

It’s not me, it’s you.

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 today 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% to 6.8% 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 pay for keeping 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 this 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.

But McConnell said today that it is the administration – not Congress—that is to blame for the holdup on the issue.

 Everyone may say they are resolve the issue, but as of now there’s been no agreement or path forward.

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 today they are still waiting for a response.

“Why doesn’t the vice president simply pick up the phone and choose one of the proposals we played out in our letter,” McConnell said today, “and then announce that the meeting that the problem’s been resolved that way, he’ll give these folks some good news to bring back to their campuses instead of just asking them to be props, props in this elaborate farce the white house political team cooked up on this issue.”

The Obama administration has held numerous events and speeches over the last few months urging Congress to prevent rates from doubling. Today, McConnell alleged that the White House and President Obama are keeping the fight going out of political expedience, blaming Congress for the holdup.

“The president may find it politically useful to keep these young people off balance, but we don’t think they should have to wait another day on this. And it’s inexcusable for the president to allow this impasse to persist. That’s why we bent over backwards to find a solution and it’s disingenuous for the president to claim otherwise.”

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 1st.

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