Republicans suggested on Thursday two potential routes to prevent the interest rate on federally subsidized student loans from doubling on July 1st.
Unless Congress strikes a compromise, millions of Americans will see the interest rate on their student loans jump from its current level of 3.4 percent to 6.8 percent. President Obama has urged lawmakers to act, frequently invoking the imperative while campaigning on college campuses, but a debate over offsetting the $6 billion cost has made the issue the latest skirmish in the ongoing budget battle.
In a letter to President Obama, Republicans offered two ways to pay for maintaining the current interest rate. The first is to have federal employees contribute a greater share of their incomes to their pensions, an idea also included in a Republican bill seeking to avert the first installment of a scheduled $600 billion in cutbacks to the military budget over the next decade.
The second proposal combines three measures: curtail the amount of time students enrolled part-time would be eligible for federally subsidized Stafford loans; limit Medicaid use by restricting states' ability to tax health care providers; and tighten data collection to prevent excess Social Security payments.