WASHINGTON — With student loan rates set to double for millions of Americans on July 1, President Obama on Thursday urged students and their parents to continue to press for congressional action.
It marked the second time in as many weeks that Obama has pressed for a resolution in the dispute over how to pay for an extension of lower loan rates for another year, as he faces off with House Republicans in another round of squabbling over the issue.
“There’s still 10 days for Congress to do the right thing,” Obama said in a brief East Room statement. “I understand that members of Congress in 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.
“Keep telling Congress to do what’s right to get this done,” he said, addressing a group of students.
On the Hill, GOP leaders have charged that Obama’s public remarks belie his administration’s refusal to engage in serious negotiations over how to pay for the $6 billion subsidies on the federal Stafford loans. Republicans say they are ready to make a deal and have offered proposals to Democrats, but that the White House has ignored them in favor of having Obama make public speeches.
Both the administration and GOP leaders want to freeze the interest rate at the current 3.4 percent and avoid an average fee hike of $1,000 per student when the rate doubles to 6.8 percent. But the two sides remain deadlocked over how to pay for the plan.
The rate increase would impact an estimated 7.4 million people.
On the Senate floor, Senate Minority Leader Mitch McConnell (R-Ky.) said Obama has been “missing in action” in talks to resolve the impasse and accused the president of putting forward no concrete proposal for how to pay to keep loan rates low.
“For the president, this is just another sad example of the election-year strategy of deflection and distraction,” he said. “We’ve proposed multiple, multiple solutions. … It’s time to stop playing games. It’s time for the president to act.”
White House Press Secretary Jay Carney rejected McConnell’s suggestion that the White House has not engaged with Congress on negotiations.
“That’s simply not true.We are actively working with members of Congress to get this done, absolutely in both parties,” Carney said. He said he believed progress has been made toward an agreement on how to pay for the initiative.
“In the end, we will get this done,” he said.
Two weeks ago, Obama spoke to students at the University of Nevada at Las Vegas and railed on Congress to approve the student loan legislation. Obama has tied college affordability to his reelection message built around a growing middle class, and he has heavily targeted the sort of young people who helped power his campaign four years ago but have grown disillusioned as the economy has sputtered.
“The number one thing Congress should do for you, UNLV, right now, is to stop interest rates on student loans from doubling at the end of the month,” Obama said at that event, drawing 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.”
White House officials have pointed to the student loan issue as an area where they hope a deal can be reached with Congress in an increasingly partisan election year.
On the Hill, Democrats and Republicans spent the past week trading blows over one another’s obstruction in the face of the impasse over how to pay for freezing rates. But more quietly, some negotiations about resolving the issue have been underway as part of a broader discussion over a two-year, $109 billion highway funding bill.
Senate Majority Leader Harry M. Reid (D-Nev.) has proposed funding the student loan rate freeze by raising premiums companies pay for pension insurance. The idea is believed to be acceptable to businesses — provided changes to rules for calculating pension liabilities that have been contemplated for inclusion in the highway measure are also approved. Reid’s gambit means resolutions to the two issues — some of the trickiest likely to face Congress before the November election — could be linked.
In the House, however, Republican leaders have insisted that they already have passed a bill that would keep student loan rates low and that it is now up to Democratic leaders in the Senate and the president to find a solution to the issue. The House bill would have paid for the item by slashing funding for a preventative health-care fund created in Obama’s health-care law, a trade-off unacceptable to Democrats.
Michael Steel, a spokesman for House Speaker John A. Boehner (R-Ohio), borrowed a phrase from a hit pop song Thursday, saying that “House Republicans have acted to stop the student loan rate hike. If the president wants to make progress on student loans, could he call Sen. Reid? Maybe?”