The politics of the Stafford loan

By Alex Veeneman on June 4, 2012

House Majority Leader Eric Cantor (R-Virginia), who co-signed on the proposals to President Obama.
(Photo courtesy of the federal government)

When President Obama appeared on Jimmy Fallon’s late night program back in April before an audience at the University of North Carolina’s flagship campus in Chapel Hill, a key political issue for a demographic historically known to be reluctant to vote had been unfolding. The interest rates of federal subsidized Stafford loans were to go up from 3.4 percent to 6.8 percent on July 1. There was a consensus that the rates should stay at 3.4 percent, and that it was a common agreement that it could be done.

However, what quickly developed from the view of a possible bipartisan solution was a clash between party priority, as campaign cycles heated up as the 5 month window to Election Day opened. On May 31, House Speaker John Boehner (R-Ohio), House Majority Leader Eric Cantor (R-Virginia), Senate Minority Leader Mitch McConnell (R-Kentucky) and Senate Minority Whip Jon Kyl (R-Arizona) sent a letter to President Obama with two proposals to extend the rate. However, the letter noted, a rate freeze would come with a cost.

The first proposal would increase the contributions of employees to the federal government’s retiree system, while the second proposal would limit the length of how long borrowers can have the subsidized loans, in addition to the revising of the Medicaid system and sharing of information for pensions of state and local workers.

“There is no reason we cannot quickly and in a bipartisan manner enact fiscally responsible legislation,” the Republican leaders wrote.

A spokesperson for the U.S. Department of Education did not respond to a request seeking comment. A spokesperson for the House Committee on Education and Workforce did not respond to a request seeking comment.

The White House criticized the proposal. “Earlier today, Speaker Boehner reportedly told his Republican colleagues that he thought this was a ‘phony’ issue,’” a White House spokesman told the Washington Post. “Now, he’s signed onto a letter asking the administration to work with him on a legislative fix.”

As negotiations continue, there is a worrying expression for the students of the country. The waiting game continues, with the hope that come July 1st, the rates won’t go up. If they do, the thoughts of the college student may be very well known come Election Day.

Follow Uloop

Apply to Write for Uloop News

Join the Uloop News Team

Discuss This Article

Back to Top

Log In

Contact Us

Upload An Image

Please select an image to upload
Note: must be in .png, .gif or .jpg format
Provide URL where image can be downloaded
Note: must be in .png, .gif or .jpg format

By clicking this button,
you agree to the terms of use

By clicking "Create Alert" I agree to the Uloop Terms of Use.

Image not available.

Add a Photo

Please select a photo to upload
Note: must be in .png, .gif or .jpg format