Obama Administration Touts Student-Borrower Plan
The Obama administration, which has gotta be reeling from news in Wisconsin and its implications for the presidential election, has had lots of big higher education announcements to make this week.
Yesterday, there was a White House event, featuring Vice President Joe Biden, to highlight the fact that 10 college presidents met with administration officials and agreed to include better information about college costs and student outcomes in their financial aid packages. That's something the administration has been pushing.
And today, the administration announced a plan to make it easier for student loan borrowers to take advantage of Income Based Repayment plans, which allow students to cap their payments at 10 percent of their discretionary income, as long as they make them on time.
A relatively small portion of students actually take advantage of this deal, so the U.S. Department of Education is teaming up with the Internal Revenue Services to make it easier to enroll. It's also rolling out an online tool intended to help students get a better handle on how loan debt will impact their finances.
U.S. Secretary of Education Arne Duncan said on a conference call with reporters that he's hoping the change will encourage more students to enroll in the Income Based Repayment program. He likened it to the administration's push to simplify the FAFSA, which he said lead to higher completion rates.
"Hopefully we'll see more folks participating [in IBR] going forward," he said.
But a lot of the questions from reporters on the call were on the hot political issue of the moment—what the White House thinks of a list of GOP ideas to cover the cost of keeping student loans at 3.4 percent for another year, put forth in a letter earlier this week. The rates are scheduled to go up to 6.8 percent in less than a month, if Congress does nothing. Both Obama and presumptive Republican nominee Mitt Romney are in favor of the move, but no one is sure how to pay for it.
Cecilia Munoz,the director of the White House Domestic Policy Council, basically ducked those questions, pointing out the history behind the back-and-forth, which, she said started when U.S. Rep. John A. Boehner, R-Ohio, the speaker of the House, called the student loan problem a "phony issue." Boehner was referring to the fact that it was Democrats who wrote the law that set the rates to double in the middle of an election year.
Meanwhile, U.S. Sen. Tom Harkin, D-Iowa, the chairman of the committees that oversees education spending and policy, held a rally today on the student loan rate issue up on Capitol Hill.
"The Republicans really do want the interest rates to double," he said. "Then they can blame Obama. This is presidential election year politics at its worst."