White House presses Senate to advance student loan deal

The White House threw its support behind a bipartisan student loan compromise Tuesday in an effort to push the bill across the finish line amid Democratic grumbling.

{mosads}Education Secretary Arne Duncan hailed the bipartisan deal as a win for students and urged lawmakers — including recalcitrant Democrats — to send the measure to the president.

“We’re all just really, really pleased the Congress is coming together,” he said. “Folks have worked really, really hard to get this done and we just urge people to get this done as soon as possible.”

Senate leaders are hoping to bring the bipartisan compromise up for a vote soon, but dissatisfied Democrats are pushing to include several amendments on the bill while others plan to oppose it.

The compromise bill would tie the rate on Stafford student loans to the 10-year Treasury bond, after Democrats had pushed for a freeze of lower rates. Borrowing rates for new subsidized Stafford loans doubled on July 1 to 6.8 percent after Congress was unable to reach an agreement beforehand.

While touting the compromise, White House officials sought to draw distinctions between it and another market-based measure passed earlier by House Republicans. 

GOP leaders have been quick to point out that their bill, the White House budget, and the new compromise all call for tying student loan rates to the government’s cost of borrowing, even as the White House threatened to veto the House bill. 

Duncan said the Senate measure contains several “significant improvements” over the House bill, including fixing the interest rate on loans instead of letting them change year to year, and minimizing the amount of deficit reduction included in the bill.

Some Democrats have argued the government still makes far too much money off its student loan program, but Duncan said it was “neither accurate nor fair” to describe the student loan program as a government profit center. 

The compromise deal would cap student loan interest rates at 8.25 percent, and Duncan pointed out that right now, students would experience a drop in borrowing rates under the deal.

He added that while the White House backed a deal to resolve the student loan standoff, the administration is eager to continue the broader debate about the cost of higher education.

“Hopefully this is the first foray of Congress working together,” he said.