Obama: Rising college costs hold back middle class

President Barack Obama on Friday urged Congress to prevent an increase in student loan rates, saying rising college costs hold back the entire middle class

Federally subsidized student loan rates are set to increase on July 1.

Federally subsidized student loan rates are set to increase on July 1. (5/31/13)

WASHINGTON - (AP) - President Barack Obama on Friday urged Congress to prevent an increase in student loan rates, saying rising college costs hold back the entire middle class and unfairly saddle young people with more debt just as they are starting out in their adult lives.

Interest rates on new subsidized Stafford loans are set to double, from 3.4 percent to 6.8 percent, on July 1.

Lawmakers from both parties say they want to avoid the increase but are divided over how to act.

Obama made his case flanked by college students dressed in business suits and dresses during remarks in the Rose Garden on a steamy Washington morning. The event marked the beginning of a public campaign by the president to temporarily extend current student loan rates or find a long-term compromise to avoid the July 1 rate increase.

"We know that the surest path to the middle class is some form of higher education," Obama said. He said Americans now owe more on student loans than on credit cards. He said he and his wife just finally paid off their loans in the last decade and paid more on them than they did on their mortgage.

"We were lucky. We had more resources than many," Obama said. He said the debt is forcing some young people to delay buying cars and houses, which can hurt the economy overall.

The White House has proposed linking federal student loan rates to the financial markets. The Republican-controlled House passed a plan last week that would reset student loan rates every year according to financial markets, but Obama has threatened to veto the bill because it doesn't lock in rates.

"The house bill isn't smart, and it's not fair," Obama argued.

advertisement | advertise on News 12

Top 5 Must See

The video shows the suspect walk into the 1 Police release video of suspect in Floral Park Motel robbery
Demonstrators protest on the National Mall in Washington, 2 Hundreds of thousands of women protest against Trump
Republican Assemblyman Chad Lupinacci, of South Huntington, drove 3 LI lawmakers return from Trump inauguration in Washington
As News 12 has reported, The IDA approved 4 Dozens protest in Hempstead over mall tax break
Police say about 800 people showed up to 5 'Sister march' held in Port Jeff Station in solidarity with DC event

advertisement | advertise on News 12

Features

Each week, News 12's Doug Geed explores the Check out fun things to do on the East End!

Explore the Twin Forks with News 12's Doug Geed.

Each week a different shelter visits News 12 Dog Day Fridays Series

Each week a different shelter visits News 12 Long Island with pets up for adoption.

News 12 digs deep to find Long Island's Discover Long Island's Hidden Past

News 12's Danielle Campbell digs into Long Island's roots.

News 12's Lily Stolzberg sees how much Long On The Spot

News 12's Lily Stolzberg sees how much Long Islanders know about everything and anything.

Sorry to interrupt...

Your first 5 are free

Access to News12 is free for Optimum, Comcast®, Time Warner® and Service Electric℠ video customers.

Please enjoy 5 complimentary views to articles, photos, and videos during the next 30 days.

LOGIN SUBSCRIBE