Obama, Congress continue work on student loan plan

WASHINGTON -- The government's subsidized student loan program, a marquee issue for President Barack Obama last year as he courted young voters on the campaign trail, is back on the White House agenda one month before a scheduled interest rate increase. But Obama's push to avoid the increase is far more low-key than it was in the election year.

The president will host college students today at the White House as he calls on Congress to keep the rates from doubling on July 1. But faced with a similar deadline, Obama by this time last year had launched a full-throated campaign to pressure Republicans to act, delivering speeches at college campuses and high schools in presidential battleground states.

Congress eventually extended the rate for one more year. Obama and his aides often point to their effort as an example of how they can mobilize the public to force lawmakers to act.

This year, Obama has been less confrontational, proposing a student loan plan in his budget and waiting to see what developed in Congress.

Last week, the House passed legislation that would link the rates to financial markets by pegging them to fluctuations in 10-year Treasury notes. The White House threatened to veto that version. The Senate has yet to act.

Obama's proposal also would link the rates to the financial markets -- a step opposed by many liberals. But Obama's plan would lock in the rates for borrowers. The Republican plan would set a cap.

Rep. John Kline (R-Minn.), chairman of the House Education and the Workforce Committee, has said his proposal has a number of similarities to Obama's plan and has described his proposal as a starting point for negotiations.

Some Democrats are seeking a two-year extension of the current rates until Congress takes up a higher education bill later. Republicans have rejected that proposal -- expected to cost taxpayers $9 billion -- as costly and irresponsible.