Obama’s Empty Rhetoric On A Long-Term Solution To Student Loans

- July 10, 2013

Today, A Bipartisan Group Of Senators Rejected The Democrats’ Partisan And Short-Term Plan For Student Loans

Today, The Senate Democrat Bill To Freeze Student Loan Interest Rates Failed “After Contentious Discussions Tuesday, Much Of It Between Democrats Who Have Been Split On The Issue.” “A Senate bill that would freeze a low interest rate on one type of federal student loan for another year, along with buying lawmakers more time to craft a long-term strategy for setting all education loan interest rates, failed to clear a procedural vote Wednesday afternoon. That bounces the issue back to negotiations yet again, as lawmakers try to reach a consensus before the August recess, at which point most students will have to lock in their loans for the coming school year. The vote was 51 in favor and 49 opposed, not enough to advance the bill. The failed key test vote came after contentious discussions Tuesday, much of it between Democrats who have been split on the issue. Senate Majority Leader Harry M. Reid (D-Nev.) met for hours with White House Chief of Staff Denis McDonough and Education Secretary Arne Duncan.” (Jenna Johnson, “Senate Student Loan Interest Rate Bill Fails On Procedural Vote,” The Washington Post, 7/10/13)

Two Senators That Caucus With Democrats – Sen. Joe Manchin (D-VA) And Sen. Angus King (I-ME) – Voted Against The Senate Democrat Proposal For A One-Year Extension Of Student Loan Interest Rates. “In a 51-49 vote, the Senate fell short of the 60 votes necessary to break a filibuster and proceed with the bill. Two senators that caucus with Democrats voted against the bill — Sens. Joe Manchin (D-W.Va.) and Angus King (I-Maine). Both are sponsoring separate legislation backed by many Republicans that would peg student loan interest rates to the 10-year Treasury rate.” (Ramsey Cox, “Senate Fails To Move Forward With Bill Lowering Student Loan Rates,” The Hill’s Floor Action Blog, 7/10/13)

The Senate’s Bipartisan Rejection Of The Democrat Plan Came Just Hours After Obama Threw His Support Behind The Senate Democrats’ Plan. “The Congress must act immediately to reverse the doubling of interest rates on student loans. The Administration strongly supports Senate passage of S. 1238, the Keep Student Loans Affordable Act, because it meets the test of restoring student interest rates to the lower levels and would apply to all loans first disbursed after June 30, even loans already disbursed, saving seven million students nearly $1,000 per student and giving the Congress time to pass a long-term solution.” (“Statement Of Administration Policy: S. 1238 – Keep Student Loans Affordable Act Of 2013,” The White House, 7/10/13)

FLASHBACK: Obama Used To Support A Permanent Fix For Student Loan Interest Rates

The White House Claims That “Obama Put Forward A Long-Term Solution” On Student Loans. “To stop rates from doubling this year, President Obama put forward a long-term solution that cuts rates this year on nearly all new loans, ensures that all students have access to affordable repayment options, and does not charge students higher interest rate to pay for deficit reduction. But Congress failed to take action on his proposal, and interest rates went up.” (“Keeping Student Interest Rates Low,” The White House, Accessed 7/10/13)

The White House Fact Sheet On Student Loan Interest Rates Claims That Obama’s FY2014 Budget “Proposed That Congress Enact A Long-Term Solution.” “To keep rates from doubling, the President’s FY 2014 Budget proposed that Congress enact a long-term solution that cuts rates this year on nearly all new loans, ensures that all students have access to affordable repayment options, and does not charge students higher interest rate to pay for deficit reduction.” (“FACT SHEET: President Obama Fights To Keep Interest Rates From Doubling,” The White House, 5/31/13)

Just Yesterday, Obama Spokesman Jay Carney Reaffirmed That Obama Is For A “Long-Term Fix” For Student Loans. NBC’s CHUCK TODD: “Is the administration’s position on the Manchin-Blunt-Alexander-Angus King bipartisan student loan compromise in the Senate?” WHITE HOUSE PRESS SECRETARY JAY CARNEY: “The President is for, as you know, a long-term fix here. But we are generally for resolution of this problem because we have already passed the deadline whereby students face a doubling of their loan rates, and there is no reason why in our view, this cannot be worked out by the Senate and the House.” TODD: “So you’re supportive of this compromise?” CARNEY: “Well we are supportive of a process that leads to a compromise and a resolution here, one that ensures that rates are kept low for students, that does not try to reduce the deficit on the back of students by jacking up their rates, and that ensures that middle-class families are able to pay the costs of college and that those that aspire to the middle class have a chance at paying for college.” TODD: “I understand, but for or against, or no position on it?” CARNEY: “I don’t have a specific position on a piece of legislation beyond the assertion that there is a path towards compromise that achieves the president’s principles. And we urge members of both houses and both parties to reach that compromise because the clock is ticking. We are confident that a compromise can be found that will be retroactive and therefore not cause harm to students and their families. But the fact is, the longer we wait, students and their families will be planning for the fall and the future and have to make decisions based on what they believe will be their rates.”  TODD: “I am going to keep following up. So could you support it or not support it?” CARNEY: “We support a process. Supporting a single bill is not the answer here.” (White House Press Secretary Jay Carney, Press Briefing, Washington, D.C., 7/9/13)

It’s Time For Obama And Senate Democrats To Support A Plan That Is Both Bipartisan And A Permanent Fix

The Bipartisan Senate Plan Would “Permanently Reform” All Federal Loan Rates And Meets Requirements Sought By Obama’s Own Proposals. “The proposal from Sens. Joe Manchin (D-W.Va.), Tom Carper (D-Del.), Angus King (I-Maine), Lamar Alexander (R-Tenn.), Richard Burr (R-N.C.) and Tom Coburn (R-Okla.) would permanently reform all federal loan rates and take the nettlesome issue off Washington’s plate year after year. It would peg subsidized and unsubsidized loans to 10-year Treasury notes plus 1.85 percent, with higher percentages for graduate student loans. The interest rates would be locked in for the life of the loan, a key requirement of the president’s that was not met in the House bill.” (Burgess Everett, “Scrambling For Student Loan Rate Fix,” Politico, 7/7/13)

The Washington Post: “With The President And The House In Near-Alignment … Obama Should Press Democrats Hard And Work With Republicans To Strike A Deal, Not To Vote For Dead-End Policy.” “With the president and the House in near-alignment, the Senate has no excuse to fail. Mr. Obama should press Democrats hard and work with Republicans to strike a deal, not to vote for dead-end policy.” (Editorial, “Senate Should Reach Accord With House On Student Loan Rates,” The Washington Post, 7/10/13)


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