Student Loan Rate Vote In House

The student loan debate continues in Washington as the House plans to vote on a bill Friday that would keep interest rates at 3.4 percent for subsidized Stafford loans, instead of increasing to 6.8 percent on July 1.

The GOP-written plan would cover the $5.9 billion cost by taking money from a preventative health fund established by President Barack Obama in 2010, differing greatly from their vote earlier this month for a 2013 federal budget that allowed Stafford loan rates to double as scheduled.

Many Democrats are reluctant to make a cut from a fund that provides money to city and state governments for health programs including breast cancer screenings and children's immunizations. Democrats are in favor of an alternative that would extend the low student loan rates by cutting subsidies to oil and natural gas companies.

House Minority Leader Nancy Pelosi, D-Calif., characterized the Republican view to CBS as, We prefer tax subsidies for big oil rather than the health of America's women.

Republicans have brought up that many Democrats voted earlier this year to cut money from the preventative health fund to keep doctors' Medicare reimbursements from dropping. Democrats acknowledge that they agreed to make cuts in the past, but will not agree now to completely deflate the fund.

House Speaker John Boehner, R-Ohio, said Thursday that Obama's campaign to keep student loan rates low was simply to score political points. Democrats and Republicans fully expected this would be taken care of, and for the President to make a campaign issue out of this - and then to travel to three battleground states and go to three large college campuses on taxpayer's money to try to make this a political issue - is pathetic, he said.

Sen. Charles E. Schumer (D-N.Y.) defended Obama to the Washington Post, saying that he successfully raised pressure on Republicans, forcing them to move forward with a proposal on student loans. But he thinks they inserted a poison pill in their bill to ensure it will not pass.

The higher interest rates would affect the 8 million students who took out Stafford loans this year, averaging $3,568, according to the Education Department.

Despite the partisan battle, many representatives have yet to decide which way they are voting. However, some Democrats are willing to accept the GOP health care cuts in order to ensure low student loan rates.