House of Representatives Speaker John Boehner urged President Barack Obama on Thursday to push Democrats in Congress to back a move to switch student loan interest rates to a market-based system before they double on July 1.
Rates on federally backed student loans are to rise to 6.8 percent from 3.4 percent unless Congress acts. Instead, lawmakers have been engaged in partisan squabbling that is expected to end in a last-minute resolution.
In an open letter to the president, Boehner attempted to align a Republican market-based approach to a similar proposal by Obama.
The bill Boehner touted, passed by the House in May, would peg interest rates at 2.5 percentage points above the 10-year Treasury note and cap rates at 8.5 percent. Rates would be recalculated every year.
Under Obama's plan, rates would also be set based on the 10-year note, plus 0.93 of a percentage point, but would be fixed for the life of the loan. His plan does not include a rate cap.
The 10-year Treasury note currently yields about 2.40 percent.
"On an issue you have made a top priority, it is astonishing that your fellow Democrats have been so openly hostile to your proposal," Boehner wrote.