Pelosi joins Democrats' push for Republicans to act on student loan rates

The leading House Democrat on Saturday joined President Obama in calling on Republicans to extend low interest rates on student loans.

House Minority Leader Nancy Pelosi warned that allowing rates to jump, as they're scheduled to do this summer, would put college "further out of reach" for middle class families struggling in the still-limping economy. 

"[I]f Republicans don't act, interest rates are set to double this July, and more than seven million borrowers will find themselves paying more," Pelosi said Saturday in a statement. "In this time of economic hardship, we should be helping make college more affordable, not putting it further out of reach."

The comments are the latest salvo in the intensifying partisan debate over whether to extend a popular, five-year-old student loan benefit. Republicans say the country simply can't afford the $6 billion tab, while Democrats counter that the country will benefit many times over by a more educated populace. They're hoping to frame the debate as one of contrasting priorities, with Republicans fighting for the wealthy and Democrats focusing on the the middle class.

"In America, higher education cannot be a luxury; it’s an economic imperative that every family must be able to afford," Obama said Saturday in his weekly address from the White House.

A 2007 law – the College Cost Reduction and Access Act – cut the interest rate on federal Stafford loans in half, from 6.8 to 3.4 percent. The legislation was initiated by Democratic leaders in Congress, but it passed with Republican support, and President George W. Bush signed it into law.

Without congressional action, the rate returns to 6.8 percent on July 1.

Republicans are already pushing back. Rep. John Kline (R-Minn.), chairman of the House Education and Workforce Committee, argued this week that any extension of the loan benefit should be offset with changes elsewhere in the budget. Additionally, Kline warned that the one-year time-frame doesn't solve any problems, but "simply kicks the can down the road and creates more uncertainty in the long run."

"Bad policy based on lofty campaign promises has put us in an untenable situation," Kline said Friday in a statement. "We must now choose between allowing interest rates to rise or piling billions of dollars on the backs of taxpayers."

Complicating the Republicans' argument about deficit concerns, GOP leaders this week passed a small-business tax cut bill estimated to pile $46 billion onto the deficit this year alone. Republican leaders have argued that tax cuts don't need to be offset, but Democrats are wondering what happened to the GOP pledge to fight for a balanced budget.

Rep. Steny Hoyer (Md.), the Democratic whip, hammered Republicans during the tax bill debate for defying their own platform of reducing deficits.

"If we are going to be serious about giving confidence to the economy, to the American people, it will be because we put our country on a fiscally sustainable path," Hoyer said. "Continuing to blow holes in revenues will not do that."

This story was updated at 2:10 p.m.