House Speaker John Boehner called out President Obama and Senate Democrats for failing to act on student loan reform Thursday, saying at a press conference that the president “hasn’t lifted a finger to get Senate Democrats to pass his own bill.”
In a letter sent to the White House on Thursday morning, Boehner called the Senate’s lack of action “unacceptable” and urged Obama to “compel your Democratic colleagues to pass a market-based student loan bill.”
With 10 days until rates on federal student loans are set to double under current law, the Senate has not passed a reform measure. The Republican-led House passed its own bill that would tie rates to interest rates on Treasury bills in May. Obama’s own preferred plan also include market-based interest rates, but as Boehner noted in the letter, Sen. Elizabeth Warren, D-Mass., blocked it in favor of her own plan when Senate Republicans offered to bring it up in the Senate.
The Associated Press reported yesterday that a bipartisan group in the Senate was working on a compromise proposal that could pass in the upper chamber. Sens. Joe Manchin, D-W.Va., Tom Coburn R-Okla., and Angus King, I-Maine, are working on a plan that would also include market-based rates for student loans and keep rates from doubling. Unlike the House Republicans’ plan, the bipartisan draft would not call for student loans to reset every year, but instead fix rates for the lifetime of a given student loan.
Arne Duncan, the president’s Education Secretary, and White House economic adviser Gene Sperling were due to meet with Senate Democrats on Thursday to find a way to craft a bill that could pass the Senate, according to a Politico report. Senate Democrats originally a plan that would have tied rates to a different Treasury bond than the one favored by Republicans and Obama and would have set a lower cap on rates.
Unless some sort of compromise is reached before July 1st, rates on subsidized Stafford loans will double from 3.4 to 6.8 percent. The bipartisan draft being worked on in the Senate would keep that rate at roughly 3.8 percent for the short term, according to the AP.