White House ‘strongly supports’ Dem student loan bill

{mosads}”The Administration strongly supports Senate passage of S. 2343 to prevent interest rates from doubling for over 7 million college students in the coming year,” read the statement, released Monday just after the Senate convened.

“On July 1st, absent Congressional action that the Administration can support, the interest rate on new subsidized Federal Direct Stafford Loans for undergraduate students is set to double, from 3.4 percent to 6.8 percent,” the statement continues. 

“Taking action to stop the doubling of these rates will save students $1,000, on average, over the life of their loans. As the economy continues to recover, and at a time when market interest rates are at historic lows, students who rely on loans to finance postsecondary education should not be burdened with additional college debt as they seek to graduate, launch a career or a business, start a family, or buy a house. The Administration is pleased that S. 2343 would offset the costs of maintaining the interest rate at 3.4 percent in a fiscally responsible manner,” the statement adds.

The Democrats’ legislation pays for the extended rate by closing a tax loophole for shareholders of S-corporations that allows them to avoid paying payroll taxes on some of their income. 

In late April, House Republicans passed their own bill, the Interest Rate Reduction Act, H.R. 4628, that extends the current loan rate. The GOP bill takes money from a fund in the Obama administration’s healthcare reform law to pay for the interest rate extension.