With student loan rates set to double in a month, President Barack Obama on Friday urged Congress to extend the current rates, a demand which Republicans rejected as needlessly partisan.
At a White house event, President Obama urged Congress to pass an extension of a program to keep student loan interest rates lower, saying, "Higher education cannot be a luxury for a privileged few. It is economic necessity that every family should be able to afford."
The president called on Congress to follow his approach and extend the low, 3.4 percent federally-subsidized student loan rate past the end of June, after which those rates would automatically double to 6.8 percent.
"If Congress doesn't act by July 1, federal student loan rates are set to double. It's like a $1,000 tax hike," the president said on Friday at the White House, where he was surrounded by college students.
Republicans in the House have pointed to legislation they have passed to address the looming interest rate hike, but Obama rejected that as wrongheaded.
"I'm glad that they took action, but their bill does not meet that test. It fails to lock in low rates for students next year," the president said. "The House bill isn't smart, and it's not fair. I'm glad that the House is paying attention to it, but they didn't do it in the right way."
The House-passed legislation would tie student loan rates to the interest rates on Treasury notes. This would effectively result in a higher interest rate for federally-subsidized loans for students next year. To that end, Senate Minority Leader Mitch McConnell, R-Ky., derided Friday's remarks by Obama as a "campaign-style event."
Indeed, the issue of student loan rates is imbued with politics. Obama used the specter of higher student loan rates as a cudgel against Republicans during last year's presidential campaign, in part to shore up his support among young voters, who supported him in droves last November. Republicans in Congress, at the urging of then-GOP nominee Mitt Romney, ultimately relented and extended the low student loan rates, but only for a year, which in turn prompted this year's deadline.
Rep. Luke Messer, R-Ind., joins Daily Rundown guest host Luke Russert to discuss the president's plan on student loans, the IRS, and the debt ceiling.
In essence, Obama is insisting as a matter of policy that Congress lock in low student loan rates as part of a broader policy to provide broader access to higher education by keeping the cost of federal student loans as low as possible. Republicans wish to keep loan rates more in line with market forces so as to prevent the loans from becoming too costly for the government to subsidize.
"Higher education can not be a luxury for a privileged few," Obama said.
This story was originally published on Fri May 31, 2013 10:54 AM EDT