House To Vote On Student Loan Rates
The House will vote Friday to extend current rates on federally funded college loans for one year. The extension will be paid for with funds from the Affordable Care Act, the Obama administration's signature health-care law. It's unclear whether Senate Democrats or the White House will accept the Republican plan. This week the president has been hammering congressional Republicans in front of college audiences in three swing states, Iowa, Colorado and North Carolina. He has said Republicans are threatening to let the rate on student loans double. The rate on federally subsidized student loans is set to double to 6.8% on July 1 unless Congress passes a bill to extend the current rate at 3.4%. On Tuesday night, Democratic Sens. Jack Reed of Rhode Island, Tom Harkin of Iowa and Sherrod Brown of Ohio introduced a Democratic proposal. It would freeze the current interest rate for one year and pay for it by closing a loophole on "S corporations," a tax structure Democrats say can be used to avoid paying Social Security and Medicare taxes. The Republican proposal also extends the current rate for one year, but it covers the $5.9 billion cost by dipping into a fund in the Affordable Care Act called The Prevention and Public Health Fund. According to health.gov, the fund is intended to promote wellness, prevent disease and protect against public health emergencies. The president has been rallying young audiences by talking about the pending increase in student loan interest rates. Young voters are a crucial demographic for Obama, particularly in swing states.