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Obama Calls on Congress to Avoid Student Loan Rate Hike

Obama Calls on Congress to Avoid Student Loan Rate Hike

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!

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Image Credit: Daniel Borman

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36 comments

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9:19AM PDT on Jun 26, 2012

thanks

2:09AM PDT on Jun 26, 2012

NO MORE INTEREST HIKES!

12:27PM PDT on Jun 23, 2012

Obama wants our kids to be able to get a education, Romney wants only kids from rich families to get an education, Romney tells poor children to get IT from your PARENTS He KNOWS their parents DO NOT HAVE "IT"!!!!!!!!!!!!!!. my oldest son is in college, he is so bright he was in GIFTED PROGRAM in grade/middle/ and high school we do NOT have money for college, my husband is in a ...........WHEELCHAIR!!!!!!, I care for my husband and our younger son is mentally impaired and mild autistic, WHERE does that monster get the right to ruin my sons college education????? oh my son in college also...WORKS!!!!!, Also I have a sweet bright adorable great nephew his mom my niece works, she does not have money for college, she and her ex-husband are COLLEGE GRADS.!!!!!!. But good jobs are oh yeah romney OUTSOURCED THEM!!!!!!, so they have to take what they...CAN, Her son is in COLLEGE he has to have help from government, he is doing great in college, and he works, what RIGHT does romney have to RUIN EDUCATIONS OF THESE and other BRIGHT HARD-WORKING KIDS, Just because their FAMILIES are poor!!!????!!??. Diana

11:48AM PDT on Jun 23, 2012

You cannot default on student loans ... Bankers are not stupid.

9:08AM PDT on Jun 23, 2012

Nancy D, why shoudn't a co-signer have to repay loans if the primary borrower dies? That's the whole purpose of having a co-signer - to guarantee payment if the primary can't pay. It isn't being a 'shark' to insist that the father you mention repay the loan - that's what he signed up to do. Why should others be out the money when the father guaranteed the loan?

7:32AM PDT on Jun 23, 2012

Steve R - I don't know about where you live, but here in Illinois you can not default on student loans. You must pay them. If you don't they will garnish your wages. No getting out without paying those loans. There was a story about a man who co-signed a student loan for his son. His son died in a tragic accident. Now they are going after the father. The federal loans his son had forgave the loans. But the private sector loans are like sharks. Is that right?

6:39AM PDT on Jun 23, 2012

Two years ago the GOP was big on rhetoric about not burdening our children with debt--where is related action on this issue that directly loads them with the debt?

4:11AM PDT on Jun 23, 2012

While we pride ourselves in being the finest country in the world, other countries are doing so much more to invest in their country's children. Do we want a country where only the rich kids can get a college education? Our president knows that is not a good idea (first hand) and so do I. As a mother of very intelligent, hardworking kids, I praise our system of loans and am proud of the assets my kids are to this world. Fortunately their loans have been paid. Why make today's kids take the hit for an economy they did not create and live in a world where the rich kids will be the only ones to become our doctors, lawyers and teachers. A far cry from what our forefathers wanted.

4:08AM PDT on Jun 23, 2012

Thanks Obama.

8:40PM PDT on Jun 22, 2012

I hate agreeing with Obama, but I see no reason why it should be necessary to hike the student loan interest rates.

Unless of course, those greedy fat cat bankers don't have enough of a brain between them to realize that they would be killing the goose that laid their golden egg.

How clever is it to bankrupt young people that haven't even finished their education yet, or at the very least, strap them with so much debt that they default on their loans?

Do they think a rate hike is going to result in a flood of new student loan applications maybe?

I guess it's true what they say - you just can't fix stupid!

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