President Barack Obama called on Congress on Thursday to “do the right thing” and keep student loan rates from doubling.
Speaking to university students in the East Room, Obama decried Congress’ lack of action on extending $6 billion in federal subsidies for Stafford loans. If the loans are not extended by the end of the month, 7.4 million people could see the interest rates on their student loans double.
“It’s mind-boggling that we have this gridlock in Washington,” Obama said. “We’ve been stuck watching this Congress play chicken.”
Congressional Democrats and Republicans both agree that the subsidy should be extended, but they have been at loggerheads over how to pay for it. Democrats have proposed covering the subsidy with an increase in taxes on pension insurance, while Republicans have proposed cutting social spending.
Obama rejected the Republican approach.
“Over in the House, they said they’d keep these rates down only if we’d cut things like preventative health care for women,” said Obama, adding that he did not want to trade one problem for another.
Obama spoke about the high student debt load carried by the country. He noted that more money is now owed in student loans than on credit cards, and that doubling the rate on loans would significantly impact students.
“If Congress fails to act, 7 million students will be hit with the equivalent of a thousand-dollar tax hike,” he said.
Republicans have accused Obama of refusing to negotiate on a loan extension. During a floor speech, Senate Minority Leader Mitch McConnell, R-Ky., said that Obama has been “missing in action” on the loan extension negotiations. Michael Steel, spokesperson for House Speaker John Boehner, R-Ohio, said, “If the president wants to make progress on student loans, could he call Sen. Reid? Maybe?”
Obama called on students to contact their representatives and senators, and even to tweet their dissatisfaction using the #dontdoublemyrate Twitter hashtag.
“There’s still ten days for Congress to do the right thing,” Obama said. “Don’t stop until it’s actually done. There’s nothing more powerful than millions of voices calling for change.”
Take Action: Tell the Senate to stop the student loan interest rate hike!
Image Credit: Daniel Borman