In Election Year Washington, Student Loans in the Crosshairs

Posted on May 2, 2012. Filed under: Uncategorized | Tags: , , , , , |

By Scott Orr

Another week, another epic election-year failure in Washington. At stake this time: the education of roughly 7 million student borrowers.

The interest rate charged on student loans is currently 3.4 percent, but that will increase to 6.8 percent if the current rate is allowed to expire on July 1. The White House, Republicans and Democrats all agree that the existing rate should be extended.

The agreement is so universal, in fact, that both President Obama and presumptive GOP nominee Mitt Romney have endorsed extending the rate during campaign appearances in the last few weeks.

But House Republicans can’t let anything, even the education of American college students, become law without forcing a partisan battle. Last week the House approved a Republican-backed plan to keep the interest rates low, but only if the extension would be paid for by taking money from a preventive care fund that is part of Obamacare.

The vote was 215 to 195, with 13 Democrats joining in voting for the package and 30 Republicans opposing it.
President Obama did not hesitate to say he will veto the package.

Democrats wondered why Republicans had to connect student loans and health care, and in the process deplete a fund that helps fight obesity, the spread of HIV/AIDS and provides training for health care workers.

House Speaker John Boehner (R-Ohio) said it is the Democrats who are injecting election year politics into the debate, though he couldn’t really explain how. “Why do people insist that we have to have a political fight on something where there is no fight,” Boehner said, sounding more like a Democrat.

On the Senate side, meanwhile, Democrats want to pay for the student loan interest rate extension by raising taxes on so-called “S Corporations,” which have three or fewer shareholders. This, Republicans charge, is another election-year ploy aimed at pitting constituencies against one another – in this case, students against businessmen.

Anyway, students, you needn’t worry. The good thing about these election-year squabbles is that they rarely, if ever, result in an impact on government policy.

This fight, like many that have already been waged this campaign season, will come to a predictable end by the July 1 deadline with a compromise measure passing that preserves the interest rate and that both sides can spin. We just wish it didn’t always have to be this way.

Turner GPA is a leading D.C.-based national lobbying and government affairs firm dedicated to delivering cutting edge policy advocacy for the manufacturing, defense, aerospace, health and energy industries. Members of our professional policy team can be reached at (202) 466-2511. We are also on the Web at www.turnergpa.com.

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