With two weeks left for the U.S. congress to prevent student loan rates from doubling, both parties seem content to make the other look responsible for the increase, rather than find a solution to the problem.
Congressional Republican leaders have made an offer to Democrats. Senate majority leader, Sen. Harry Reid (D-Nev.), has made an offer to Republicans. Both offers came in the form of letters, issued weeks apart, yet neither side has yet moved to kick off formal talks on the proposed frameworks. Even more telling has been the virtual silence from the White House.
The current student loan interest rate is set to double from 3.4 percent to 6.8 percent on July 1. The hang-up in Congress has been over how to pay for the nearly $6 billion extension of current interest rates.
To date, the two parties have enjoyed playing political football with the issue, hoping that whoever is holding the ball when time expires can be blamed for the rate hike that would affect the more than 7 million undergraduate students who use the loan program.
In an offer made late last month, speaker of the House of Representatives, Rep. John Boehner (R-Ohio); House majority leader, Rep. Eric Cantor (R-Va.); Senate minority leader, Sen. Mitch McConnell (R-Ky.); and Senate minority whip, Sen. Jon Kyl (R-Ariz.), outlined two proposed offsets. One included Medicaid changes that would be unacceptable to Democrats. But the other alternative, which would require federal employees to pay more toward their retirement benefits, seemed to provide enough room for compromise for Democrats to work with.
In his letter to Republicans, Reid proposed a “payfor” that already was agreed to by Republicans in a Senate transportation bill. Reid suggested creating fewer tax deductions for pension contributions and increasing premiums that employers pay to the Pension Benefit Guaranty Corp.
“The combination of these two proposals will provide sufficient resources to fund both a one-year extension of the current student loan interest rate and reauthorization of the nation’s surface transportation programs,” said Reid. Republicans have failed to respond to Reid’s proposal.
The White House issued an emailed statement in response to an inquiry on the progress of negotiations by Roll Call. “We’re confident that if congressional Republicans are serious about sparing more than seven million students the equivalent of a $1,000 tax hike, members of both parties can come together and get this done before rates double in two weeks.”