Is Congress Nearing A Deal On Student Loans?

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After weeks of deadlock, Congress appears to be narrowing its differences on how to avert a hike in student loan interest rates on July 1.

The public manner of negotiations suggests that a deal may not be imminent. But the back-and-forth reveals that both parties feel enough election-year pressure not to be seen on the wrong side of the cause.

The latest development came late Thursday afternoon when Senate Majority Leader Harry Reid (D-NV) wrote a letter responding to GOP leaders’ proposal on how to fund the $6 billion cost of a one-year freeze.Reid offered two proposals of his own. The first proposal would limit the tax deductions employers may seek while determining their pension liabilities, and the second would raise employer contributions to the U.S. agency that insures pensions.

House Speaker John Boehner (R-OH) did not dismiss those ideas.

“The House has passed legislation to prevent student loan rates from doubling on July 1; the Democratic-controlled Senate has not,” said his spokesman Michael Steel. “We look forward to the Senate considering Senator Reid’s proposal — and if the Senate passes it, we will address it.”

Republican leaders last Thursday offered two proposals; one would require federal employees to pay more into their pension plans, and another would lower the window of time part-time students could benefit from federally subsidized loan rates.

President Obama has been hammering the issue on the campaign trail, warning that 7 million students will see their student loan interest rates double from 3.4 percent to 6.8 percent if no action is taken.

“How many people can afford to pay an extra $1,000 if you’re a student just because Congress can’t get its act together?” the president said Thursday at a campaign event at the University of Nevada Las Vegas. “That makes no sense. This is a no-brainer.”

But the White House has kept its distance from the debate in Congress, declining requests to weigh in on the Republicans’ or Democrats’ offers. Steel noted that the White House has still not responded to the GOP’s offer from last week.

ABOUT THE AUTHOR

Sahil Kapur is TPM's senior congressional reporter and Supreme Court correspondent. His articles have been published in the Huffington Post, The Guardian and The New Republic. Email him at sahil@talkingpointsmemo.com and follow him on Twitter at @sahilkapur.
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