Compromise: House GOP Offers Student Loan Extension

Kate Hicks

4/25/2012 4:14:00 PM - Kate Hicks

Call it a win for President Obama, or a win for bipartisanship, or a win for students. However you see it, the House Republicans have offered a solution to the student loan interest rate hike that loomed in July. The bill, which the House will vote on this Friday, will keep the rates from doubling 3.4% to 6.8%. Essentially, the biggest difference in the GOP proposal from the Democratic one stems from where the money comes from, with the GOP attempting to avert a tax increase. 

The House legislation would cost roughly $6 billion and would be paid for by the health prevention fund in the administration’s health care law to help prevent chronic disease. The same fund was tapped to pay for the payroll tax deal earlier in the year. Senate Democrats have their own version of the same type of legislation that would be funded by a change in S Corporation tax law.

While it seems the Republicans have changed their tune on the issue, it's not wholly surprising, given Mitt Romney's expressed support for the measure. Besides, it's nearly impossible to argue in favor of the loan hike without incurring the wrath of college students everywhere. It's a blame game to be sure -- the GOP has tried to emphasize that the Democrats set themselves up for failure when they passed the measure back in 2007 -- but "Republicans will let your loans get more expensive" trumps "the Democrats did it."

Now, the game becomes framing the debate. Speaker of the House John Boehner has already commented on the matter, referencing Obama's college swing-state tour. Boehner says Obama is picking a fight where there isn't one, and by proposing a solution to the interest rate hike, it sure does look like the GOP is trying to render Obama's transparently campaign-centric trip moot. What was the point of giving all those speeches if Congress was fixing the problem?

An early solution to the problem might be good for America, but perhaps not so much for Obama's reelection efforts. A prolonged fight and a dramatic, last-minute solution, as Congress has been wont to do in the past, certainly would've helped the president in his quest to reenergize the youth. Alas, it seems the president has lost out on a talking point, perhaps earlier than anticipated. Of course, student loans are still an issue, but the runaway train of education spending has averted immediate cliff-side disaster. It's only a matter of time before we see the next angle Obama takes to corner the youth market.