The Senate, capitulating to pressure applied by Barack Obama, has settled on a deal on student loans and sent it to the House for approval, where conservative House Republicans have the numbers to tank the proposal. Obama has been courting the youth vote for months with his speeches at college campuses exhorting Congress to extend the period of the current rate on federal Stafford loans, 3.4%, rather than doubling it. Senate Majority leader Harry Reid (D-Nev.) and Senate Republican leaders Mitch McConnell and Jon Kyl tout the bill agreed upon as necessary, putting the screws to House Republicans.
Reid: “We basically have the student loan issue worked out. The next question is what do we put it on to make sure we can complete it.”
McConnell: “Sen. Reid and I have an understanding that we think will be acceptable to the House. That may or may not be coupled with the highway proposal over in the House.”
Kyl: “We’ve reached an agreement on the (student loan) bill, and the only thing that would be holding that up is the politics of the highway bill.”
What McConnell and Kyl are referring to is a huge federally funded transportation bill that may provide three million construction jobs. By attaching the student loan bill to the transportation bill, which is nearing completion in the House, a swift path to the White House would be set. But federal funding for the transportation bill evaporates on Saturday, making the passage of the bill this week urgent. Thus the Senate hopes to bully the House into acting quickly.
But House Republicans have ideas of heir own. They want to attach a provision to the transportation bill that would speed up approval of the Keystone XL crude oil pipeline from Canada to Texas, which Obama shelved earlier this year because of pressure from environmentalists.
The real question is whether anyone has the guts to resist Obama’s transparent attempt to court college students. The actual figures of how much more college students would owe on their loans if the rate rises are comparatively negligible. The White House estimates that failing to extend the low rate would cost roughly 7.4 million students an average of about $1,000 more over the life of their college loans.
So who is going to pick up the tab so college students won’t have to work off another $1,000? Get this: of the $6 billion needed to extend the current rate, $5 billion would be taken from employers’ pension liabilities. Yup, you heard that right; employers now get to fund college students so the poor kids don’t have to pay another whole $1,000. All because Obama panders to the youth vote.
In the end, the House will probably have to go along, because otherwise Obama will demagogue the issue to death in his campaign.
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