The current Congressional clash about how to prevent student loan interest rates from doubling for more than 7 million college students is a good example of how very little is getting done in Washington, D.C., especially as the battle lines harden for the Nov. 6 general election match-up between President Obama and former Mass. Gov. Mitt Romney.
The Democrats who control the U.S. Senate favor a bill that close what they call a loophole in the tax code that allows people who control privately-held corporations worth $250,000 or more avoid paying payroll taxes. That new income would prevent subsidized Stafford loan interest rates from jumping from current 3.4 percent to the 2006 level of 6.8 percent on July 1.
Republicans in the Senate Tuesday afternoon filibustered to prevent a vote on that legislation.
The Republicans who control the U.S. House have approved a bill that would prevent the interest rate increase, funding it with $17 million siphoned from the preventative health fund in Obama's signature Affordable Care Act, aka Obamacare. The Associated Press last week reported that the preventative health fund includes payments for "breast cancer screening, childhood immunizations research and wellness education."
Don't expect the Democrats in the Senate to move on this Republican bill anytime soon.
The Obama re-election campaign hosted a conference call Tuesday on the issue that included Kathryn Badillo, who is graduating from Millersville University on Saturday and paid for her education with subsidized and unsubsidized Stafford loans. Badillo, from Easton, said she owes about $25,000 in loans, calling that close to the national average for students.
"For me and my family, education has always been valued and encouraged," said Badillo, who called Millersville an affordable school but still expressed concerns about her debt. "At 18, when you're offered the ability to go to school and pay for it later, it seems OK."
The Republican National Committee Tuesday afternoon accused Obama of playing "election year politics" on the issue of student loans.
The Obama administration says keeping the loan rates at their current levels would create an average savings of $1,008 for 393,585 students holding 448,465 Stafford loans in Pennsylvania. Those loans have an average amount of $4,090.