With just one month until they expire, House Speaker John Boehner proposed a new plan to cover the cost of the $6 billion bill that would keep student loan interest rates from doubling from 3.4 percent to 6.8 percent, to the White House. But nobody is ready to give him the super-hero cape at 1600 Pennsylvania Avenue. [See why Friday's jobs report may disappoint.]
At a press gaggle Friday, Deputy White House Press Secretary Josh Earnest wouldn't acknowledge whether or not President Barack Obama was onboard with either of the new plans.
"What I can tell is that our policy folks are evaluating proposals that the Republicans have offered, and so we'll evaluate what they've offered and we'll take a look at it," Earnest said.
The White House even took a swing at Boehner, chastising him for sending "mixed signals" on the student loan issue.
Thursday, Boehner reportedly told his GOP colleagues that the student loan debate was phony and then hours later sent a letter to the White House outlining two new ways to maintain Stafford loan interest rates at 3.4 percent. [See why the teen jobs problem is worse than it looks.]
Earnest expressed admonishment for Boehner's choice of words among Republican lawmakers.
"The President certainly believes the prospect of increasing — of doubling the interest rate on middle-class students and their families is not a phony issue," Earnest said. " We're talking about adding $1,000 to the debt load of the average college student if we see these interest rates double a month from today. That's not phony. I understand that the Speaker of the House may have actually used even more colorful words to describe this issue, which is unfortunate. Hopefully, the Speaker, in the form of that letter, was indicating a genuine willingness to work with the President to solve this problem."
Sen. Mitch McConnell, who along with House Majority Leader Eric Cantor and Senate Republican Whip Jon Kyl signed the letter Boehner sent, is optimistic Obama will support the new plans.
McConnell Spokesman Don Stewart says the White House should be jumping up and down considering the Republican leadership took a page right out of the president's own budget to finance the student loan bill.
"We took it straight from the president's budget, so I don't see why he would object," Stewart says. "The only people working on this bill that is supposed to be such a high priority are Republicans."
One of the plans Boehner outlined would require employees who pay into the Civil Service Retirement System or the Federal Employee Retirement system to contribute .4 percent more of their paychecks each year over a three-year period.
The other proposal revises Medicaid taxes, seeks to reign in social security overpayments and shortens the amount of time students have before interest starts accumulating on their student loans. Right now students don't begin accumulating interest on loans until they graduate. Under this program, students would only get 150 percent of their program's estimated completion time to finish their degree before interest starts to set in. [See what nobody's telling American workers.]
Matthew Chingos, a fellow at the Brown Center on Education Policy says, in other words, if you are in a four year bachelor's program, you would only have six years of subsidized loans. After that, interest will start accruing even if a student is still in school.
However, despite all of the controversy over how to pay for the bill, both proposals still only freeze interest rates for one year.
"All this does is set us up to have this stupid argument again in a year," Chingos says. "The cost of college is the real problem. They are capitalizing on popular sentiment on that."
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