Obama pressures Congress to prevent student loan rate increase? his way

President Barack Obama on Friday publicly called on Congress to prevent Stafford student loan interest rates from doubling this summer after pledging on the 2012 campaign trail to keep it from going into effect. But he wants members to do it his way.

In a Rose Garden speech surrounded by college students, the president asked Congress to pass an extension to keep rates on subsidized student loans from doubling from 3.4 percent to 6.8 percent. Stafford loans, which are offered to low- and middle-income students, are currently at 3.4 percent. Congress passed an extension of that rate last year, but it's set to expire July 1.

"Higher education cannot be a luxury for a privileged few," Obama said Friday. He noted-- as he has in the past-- that he and his wife Michelle only paid off their student loans, which he said cost more than his mortgage, nine years ago. "And we were lucky," he said, noting he and his wife had "more resources than many."

This was around the same time the First Couple wanted to begin saving for their daughters' college funds, he said.

[Read more Yahoo News coverage of the student loan debate here.]

Obama had warned on the 2012 campaign trail that allowing the rate to double would cost the average student borrower $1,000 for each year of college over the life of their loan?a potentially decision-making price to pay for recent graduates and families considering whether they can afford the expense of college in a tough economic climate. Congress, facing pressure from the public, passed an extension before the rates increased.

But ahead of the July 1 expiration, Washington finds itself in the same situation.

"If this sounds like d?j? vu all over again, it's because it is," Obama said Friday. He called on Americans to once again pressure Congress to act.

The Republican-led House has already acted. House members passed a student loan plan offered by Republican Rep. John Kline of Minnesota, chairman of the House Committee on Education and the Workforce. His proposal ties rates on student loans to the interest on the 10-year Treasury rate. But the White House and many Democrats take issue with that plan because interest rates would change annually.

"The House bill isn?t smart and it isn?t fair," Obama said. He once again took issue with the fact interest rates would change annually and said Kline's plan also "eliminates safeguards for lower income families." "That's not fair," he said.

Several Democrats have offered their own plans in Congress, as has the president.

Obama outlined his proposal in his budget this year. Like Kline's plan, it also calls for tying rates on student loans to the interest on a 10-year Treasury note, but it also locks in those rates for the life of the loan.

Some student loan advocates criticize the president's proposal because it doesn't provide a cap on those rates?something included in Kline's plan.

Republican Senate Minority Leader Mitch McConnell chalked Friday's event up to politics.

"With the President and Congressional Republicans in agreement on the need to provide a permanent reform to address the increase in interest rates on new student loans, no one should be fooled by today?s campaign-style event at the White House," the Kentucky Republican said in a statement. "House Republicans have already passed legislation that would prevent a rate hike, and Senate Republicans have proposed a solution similar to one the President himself called for in this year?s budget. Here?s one issue where the two parties can and should find quick agreement. Unfortunately, the President appears more interested in needlessly stoking partisan divisions in Washington than helping young Americans avoid a higher interest rate on their student loans.?

Source: http://news.yahoo.com/blogs/ticket/obama-pressures-congress-prevent-student-loan-rate-increase-142245722.html

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