Cohen Says Student Loan Rate Deal Likely

Memphis Democratic Congressman Steve Cohen says a deal is likely on keeping interest rates on federal student loans at around 3 percent. If Congress takes no action, those rates could double.

Democrats and Republicans agree that raising student loan interest rates is a bad thing. The disagreement is how to pay for an extension of those low rates. Republicans want to trim funding to the President’s health care overhaul. Democrats have proposed ending subsides to oil and gas companies.

Cohen says Congress is likely to reach a deal, even if it’s only for a year. While he’d support a short-term fix, Cohen says the interest rate should stay where it is.

“I don’t think there’s any reason there should be an increase. I think it should stay at 3.4 percent. Interest rates in general, on all type of instruments, are at the lowest point ever.”

In 2007, when Democrats controlled the House, Cohen voted for the rate decrease which was set to expire in July of this year.

Republicans have said the timing seems nakedly political, designed to rile up the Democratic base in a presidential election year.