Political battle over student loans heating up

ALAN FRAM Associated Press Published:








The backdrop to the student loan fight is a push by both parties to appeal to younger voters, an Obama strength in his 2008 election win, and to signal their sensitivity to families' struggles during the economy's prolonged slump. Letting the loan rate double this summer would cost 7.4 million Stafford loan recipients an average $1,000, according to the administration.


The House GOP bill is paid by cutting health care programs Democrats treasure. The Senate Democratic version would force high-earning owners of some privately owned corporations to pay more Social Security and Medicare payroll taxes, violating Republicans' anti-tax doctrine.


"Rather than letting student loans become a pawn in the latest political fight, the House will show our commitment to our nation's students and extend the current rates without adding a dime to the deficit," said House Majority Leader Eric Cantor, R-Va.

It didn't take long for the measure to stir up opposition among Democrats.

"We should be able to work together to find offsets that don't penalize middle-class families or undermine efforts to help more Americans stay healthy," said White House spokesman Nick Papas, who expressed confidence that a compromise could be reached.

Rep. George Miller of California, top Democrat on the House Education Committee, accused Republicans of trying to keep student interest rates low by "extracting the price from women and children."

House Minority Leader Nancy Pelosi, D-Calif., a supporter of the health fund Republicans targeted, said the GOP had made "a dramatic reversal" because Republicans had recently pushed a federal budget through the House that would have let student interest rates double. But her statement stopped short of saying she would oppose the GOP bill on Friday.

Senate Majority Leader Harry Reid, D-Nev., said Democrats opposed cutting the health program "just so Republicans can continue protecting millionaire tax dodgers."

That reference was to his own legislation, which would pay for keeping student loan interest rates level for a year by forcing high-income owners of some privately held corporations to pay more Social Security and Medicare payroll taxes.

Senate Republicans say they support freezing students' interest rates but have strongly opposed boosting those companies' payroll taxes.

"Democrats want to pay for it by raiding Social Security and Medicare, and by making it even harder for small businesses to hire," said Senate Minority Leader Mitch McConnell, R-Ky. "We happen to think that at a time when millions of Americans and countless college students can't even find a decent job, it makes no sense whatsoever to punish the very businesses we're counting on to hire them."


Associated Press writer Ricardo Alonso-Zaldivar contributed to this report.