WASHINGTON – House leaders are backing a vote today on a bill that would reauthorize the low 3.2% rate on student loans as President Obama has called for – but would take the $6 billion a year to fund the reauthorization from the President’s health care program.
The bill, which is widely expected to pass the House today, would cut a $17 billion prevention and public health fund for immunization campaigns, research, screenings and wellness education. That fund was created by Obama’s health care overhaul law.
Without reauthorization, the rate on government-backed Stafford loans for 7.4 million students would double to 6.8% on July 1.
The rate on federally insured loans is important to the fast-growing private loan market, into which hundreds of credit unions have entered in the past two years because it largely sets the rate for student loans and determines how much money students must seek after they obtain a federal loan.
House Minority Leader Nancy Pelosi, D-Calif., on Thursday said she will oppose the GOP-written bill.
In the Senate, Democrats have proposed a bill that would keep student loan interest rates at 3.4% for another year. It would be paid for by increasing the Social Security and Medicare payroll taxes owed by upper-income owners of some privately held corporations, including many lawyers’ and doctors’ practices.
Senate Republicans have voiced adamant opposition to that payroll tax proposal, saying it would make it harder for those firms to hire workers. But their leaders said they backed the goal of freezing interest rates for a year and accused Obama of trying to turn the issue into a political fight.
