Political Fight Over Student Loans Heats Up

By: CNN Posted By Doug Brown
By: CNN Posted By Doug Brown

Washington (CNN) – The political battle over legislation to reduce the costs of student loans ramped up Thursday.

Democrats accused Republicans of walking away from an issue critical to middle-class Americans just as Republicans proposed several specific options to offset the billions of dollars needed to extend lower interest rates for another year.

First, top Democrats seized on news reports that House Speaker John Boehner told his members he didn't think a deal could be reached before the July 1 deadline when reduced interest rates on Stafford loans are set to expire and the interest rate will double to 6.8%.

In a closed session with House Republicans, Boehner blamed the stand-off on President Obama who Boehner said wants to "fabricate fights on things like student loans because he's out of ideas; he doesn't want to talk about his record or his failed policies," a GOP source told CNN.

As evidence of his desire to keep the rates down, Boehner said if the interest rate expires, he would push new legislation to lower the rates retroactively.

A doubtful Sen. Chuck Schumer of New York fired back. The Senate Democrats' top political messenger said the news reports "confirm our suspicions that Republicans were never serious about wanting to stop rates from doubling on college students. To many on the hard right, government should not play a role in helping students afford college. Speaker Boehner seems to be following their lead and throwing in the towel on this issue a month before the deadline."

Schumer said it seemed Boehner "would rather let costs rise on middle-class families that work across the aisle to find a bipartisan solution."

Just over an hour after Schumer issued that statement, the top four House and Senate Republicans released a letter they sent to the president outlining several funding measures to extend the lower rates.

"There is no reason we cannot quickly and in a bipartisan manner enact fiscally responsible legislation," they said in their letter.

Signed by Boehner, House Majority Leader Eric Cantor of Virginia, Senate Minority Leader Mitch McConnell of Kentucky and Senate Republican Whip Jon Kyl of Arizona, the letter presented options for offsetting the nearly $6 billion cost of the bill. They said they drew their ideas from the budget request the president submitted to Congress for 2013. The ideas include: requiring federal employees to contribute more to their retirement programs; limiting the amount of time students get for an in-school interest subsidy; revising a Medicaid provider's tax; and preventing overpayments by Social Security.

The House and Senate each have already passed an extension of the lower interest but they did with different cost offsets. The letter to the president was an effort to kick start talks to merge the two bills, a Senate GOP leadership aide explained.

There was no immediate response from Senate Democrats or the White House on the Republican proposals.

Drew Hammill, a spokesman for House Minority Leader Nancy Pelosi, said the letter was "a complete and utter ruse."

"In the privacy of his Republican Conference meeting this morning, the Speaker said that he will abandon efforts to prevent student loan interest rates from doubling by July 1st,” Hammill wrote. “This letter is nothing more than a damage control effort to try to hide the disdain the House Republican leadership continues to show for the millions of American students who are struggling to afford to pay for college."


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