Federal loan rate hikes hit students

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Interest payments more costly

Ahead of the 2012 presidential election and the doubling of interest rates on federal student loans, President Barack Obama took to the road to push his proposal to stop what he says is a tax increase on more than 7.4 million students from occurring on July 1.

Traveling to the University of North Carolina-Chapel Hill, the University of Colorado and the University of Iowa, the president emphasized that he was fighting for students while Republicans – led by presumptive GOP presidential nominee Mitt Romney – were voting to prevent middle-class Americans from “getting a fair shot at an affordable college education.”

“The key point here is, is that in America, higher education can’t be a luxury. It’s an economic imperative that every family has got to be able to afford,” Obama said on a conference call with college reporters en-route to Colorado. “So the bottom line here is we can’t just cut our way to prosperity. Making it harder for our young people to afford higher education, allowing them to earn their degrees — that’s nothing more than cutting our own future off at the knees. And Congress has to keep interest rates on student loans from doubling, and they need to do it now.”

The president also took a veiled shot at Romney, who is estimated to be worth more than $250 million. According to a transcript released by the White House, in Iowa City, Obama said he just recently finished paying off his loans and that he was committed to making sure student debt didn’t interfere with the pursuit of the American dream.

“This is personal for me,” Obama said. “Michelle and I … We didn’t come from wealthy families. We needed loans, and we needed grants to get our way through. I’m the President of the United States. It was only about eight years ago that we finished paying off our student loans.”

Obama’s proposal would cost the federal government an estimated $6 billion, according to the White House.

GOP leaders were quick to seize on the president’s fiery rhetoric – at one point accusing Republicans of favoring the wealthy over students – with criticism of his own plan.

“President Obama’s failed leadership on the economy has led to the weakest recovery since the Great Depression, where 50 percent of recent college graduates are unemployed or underemployed,” Romney said in a statement. “Ultimately, what young Americans want and need is a new president who will champion lasting and permanent policy changes that both address the rising cost of a college education and get our economy really growing again.”

The battle comes as no surprise as both parties are fighting for the youth vote. That group went overwhelmingly for Obama in 2008; the president won the 18-24 year old vote in 2008 by a 34 point margin, beating GOP nominee John McCain 66 to 32, according to a CNN estimate.

Recent polls show Obama leading Romney by around 20 points in the 18-24 age range.

The University News will have more about student debt – and what it means for the next generation – in next week’s paper.