President Obama on Saturday signaled his support for a student loan reform measure proposed by Senate Democrats that could come up for a vote next week.
In his weekly address, Obama outlined the myriad ways in which college prices and student loan debt have risen over the past three decades.
But he pointed to a bill proposed by Sen. Elizabeth Warren (D-Mass.), that could come up for a vote as early as Wednesday, as a solution.
“The good news is that Senate Democrats are working on a bill that would help more young people save money. Just like you can refinance your mortgage at a lower interest rate, this bill would let you refinance your student loans. And we’d pay for it by closing loopholes that allow some millionaires to pay a lower tax rate than the middle class,” he said.
“That’s the choice that your representatives in Congress will make in the coming weeks – protect young people from crushing debt, or protect tax breaks for millionaires.”
The bill allows graduates with existing federal loans to refinance those loans at the lower interest rates offered to new borrowers.
But the proposal has met significant opposition from Republicans, in part because it pays for an increase in government spending through a new tax on top earners. A Congressional Budget Office report on the bill indicated it would increase federal spending by $51 billion from 2015 through 2024, a sum paid for by those earning between $1 million and $2 million.
Although Obama was initially reluctant to support the measure, he is expected to fully endorse it during at White House event on Monday.
The proposal is a key part of Democrats’ election-year agenda, which focuses on policies Democrats believe will be beneficial to the middle class. If it does pass the Senate, however, it’s sure to face fierce opposition in the House, and will give Republicans an opportunity to hit Democrats on pushing higher taxes on the wealthy.
But Obama is banking on the belief that Americans want to see something done about the growing student loan debt weighing on the nation’s graduates. In his address, he said he’ll also be unveiling a unilateral move from the White House next week to help ease that burden.
"And while Congress decides what it’s going to do, I will keep doing whatever I can without Congress to help responsible young people pay off their loans – including new action I will take this week," Obama said.