Parties Disagree on Funding for Low Stafford Interest Rates
May 2, 2012

By Carlin Sack for

Slow jamming the news sure brought a lot of attention to student loans. Ever since President Barack Obama appeared on “Late Night with Jimmy Fallon” to address the challenge that student loans present, Republicans and Democrats have critiqued his tactics and used it to further draw attention to their party’s solution to high interest rates. Many Republicans have criticized Obama’s appearance and slow jam, saying that he is trying to overshadow true issues by this more lighthearted approach, while supporters attest that Obama drew much-needed attention to the issue.

During his appearance, Obama called on viewers to tell their members of Congress to extend the lowered interest rate of 3.4% on Stafford loans.

On Friday, a bill that would do just that passed in the House on mostly partisan lines. But under this bill, the interest rate extension would be paid for by taking funds from Obama’s health care law.

House Speaker John Boehner, a Republican from Ohio, emphasized that Republicans who voted against the bill actually do support extending the low interest rate of 3.4%, but prefer to pay for the extension in other ways. Republicans support that funds are taken from a fund set up by the health care law for various state health initiatives. Democrats, of course, oppose this, saying that taking away these funds could be potentially damaging to women’s healthcare because it could take away funding used for mammograms or pregnancy screenings.

So, both sides agree that Congress should take action in order keep interest rates on Stafford loans from rising to 6.8% on July 1. But during this election year, funding will prove to be an essential issue for each party as it might be used against Congress members in November.

Although about 7.5 million undergraduates have Stafford loans to pay for the cost of college, some students argue that even keeping Stafford rates at 3.4% does not change the overall problem of the rising cost of getting a college education. Both parties will likely be forced to address this problem over the next few months, as both will be vying for the votes of college students and graduates.

If Congress does not pass the bill to extend the lowered interest rates, the average college student will end up paying $1,000 more each school year.

But as the debate about Stafford loan interest rates continues through Election Day, the public can only hope that Republicans and Democrats alike will put the fiscal wellbeing of college students and graduates at the forefront.

Carlin Sack writes for and attends Northwestern University’s Medill School of Journalism