Obama Pushes To Keep Student Loan Rates Down
ROBERT SIEGEL, HOST:
President Obama says he wants Congress to keep student loan rates from doubling July 1st. If lawmakers don't act, those rates will jump from 3.4 to 6.8 percent. NPR's Ari Shapiro reports the president held a White House event this morning to increase the pressure.
ARI SHAPIRO, BYLINE: It was a steamy morning in the White House Rose Garden when President Obama stepped out in front of a group of college students and graduates. The president said it's inspiring to spend time with young people.
PRESIDENT BARACK OBAMA: Those of you who've had to put on suits and ties and show up at the White House first thing on a Friday morning may not feel the same way I do, but I appreciate all of you being here.
SHAPIRO: This morning, those young people in suits and ties were a visual aid meant to illustrate the cost of congressional inaction. If lawmakers don't prevent student loan rates from doubling, the president said the average college student will pay an extra thousand dollars a year.
OBAMA: That's like a thousand-dollar tax hike. I assume most of you cannot afford that. Anybody here can afford that? No.
SHAPIRO: Congress had the same debate with the president around this time a year ago. They reached a deal for one year. Now, the deadline is approaching. Lawmakers agree with the president that something must be done, but they disagree on the details. House Republicans passed a plan that would allow student loan rates to change over time, like an adjustable mortgage with the ceiling of 8.5 percent. The president doesn't like that.
OBAMA: That's not smart. It eliminates safeguards for lower income families. That's not fair. It could actually cost a freshman starting school this fall more over the next four years than if we did nothing at all.
SHAPIRO: In contrast, the White House plan locks in rates once you've purchased a loan and it gives low income students a rate 2 percent lower than everyone else. His plan also caps payments at 10 percent of a graduate's income. Members of Congress are home right now so there was not an immediate reaction from Capitol Hill today, but they'll be back next week. That's when this debate may begin again in earnest before the deadline arrives in just four weeks.
Ari Shapiro, NPR News, the White House. Transcript provided by NPR, Copyright NPR.