Cha-ching: Interest rates on student loans set to double

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WASHINGTON — U.S. senators headed home for a Fourth of July recess without passing a bill that would prevent interest rates from doubling on student loans next week, leading to a ramp-up of political finger-pointing.

Last year, Democrats used the looming increase in the cost of student loans to great political effect, pressuring Republicans in an election year and rallying young voters in support of President Obama’s campaign.

Now, as a temporary extension of discounted interest rates is set to lapse, Democrats are at odds with one another over the issue, with the party’s leaders privately grumbling about aWhite House proposal nearer to Republicans’ solution than their own.

Student loan rates set to double

Courtesy LA Times

So Republicans are happily turning the political heat on Democrats.

“Interest rates on student loans are about to double because the president and Senate Democrats won’t resolve this impasse,” said House Speaker John A. Boehner (R-Ohio).

The divide among Democrats was evident in dueling press conferences Thursday.

In one, a bipartisan group detailed what they called a compromise plan that would bridge differences in market-based plans passed by the House, proposed by Senate Republicans and initially offered by Obama in his budget.

The other was attended only by Democrats, who for the second time proposed simply extending current rates for an additional year, the favored approach of the Senate’s leaders.

For more on this LA Times story, click here.

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