Obama Criticizes Republicans Over Student Loan Rates

Luke Sharrett for The New York Times

President Obama spoke on Thursday at the University of Nevada, Las Vegas, before 2,500 mostly young supporters.

By JACKIE CALMES

LAS VEGAS — After a day of fund-raisers in California, President Obama on Thursday traveled again to swing-state Nevada for the one event of his two-day Western trip that was designated as an official appearance, as opposed to a campaign stop. But it again illustrated that everything is political in an election year.

Related

• Campaigns Blitz 9 Swing States in a War of Ads (June 8, 2012)

• Romney Raised More Than Obama in May (June 8, 2012)

• Republicans in Senate Block Bill on Student Loan Rates (May 9, 2012)

• Student Loan Debate Becomes Election-Year Fight (April 27, 2012)

Connect With Us on Twitter

Follow @NYTNational for breaking news and headlines.

Twitter List: Reporters and Editors

Mr. Obama campaigned not against Mitt Romney but against Republicans in Congress, saying they “can’t just sit on their hands” and ignore his job-creation proposals.

He emphasized the issue of keeping college loans affordable, a topic which resonates with many younger voters whose support Mr. Obama needs for reelection. And he did so at the University of Nevada, Las Vegas, before 2,500 mostly young supporters whose energy and chants of “four more years” gave the event the feel of a campaign rally.

According to the local newspaper, Mr. Obama’s arrival coincided with a new television ad here from his campaign that echoed the president’s message. In the ad, Mr. Obama urges Congress to pass the measures he first proposed last September, as part of his job-creation package, to help states pay for keeping teachers and first-responders at work and to finance public infrastructure projects providing jobs for construction workers.

But, he told the university crowd, “Making college affordable — that’s one of the best things we can do for the economy.”

Mr. Obama sought to spread the word that his administration is speeding a change in a 2009 law that will allow people who remain current on repaying their federal Stafford loans to have their repayments capped at 10 percent of their disposable income, down from 15 percent, so borrowers can more easily manage their debt. The change is to take effect in 2014 but the administration wants the cap effective for new loans after this year. Also, Mr. Obama promoted a new directive to his education and treasury secretaries to ease the process of applying for the repayment option.

But, he told the university crowd, “the No. 1 thing Congress should do for you is to stop interest rates on student loans from going up.”

The reference was to Mr, Obama’s fight with Congress over the interest rate on current Stafford loans. The rate, cut in half to 3.4 percent five years ago to help borrowers as the economy soured, is due to return to 6.8 percent on July 1, affecting more than 7 million student loans. While many Republicans, including Mr. Romney, say they agree that the rate should temporarily remain at the lower level, the parties disagree over how to cover the government’s one-year cost of $6 billion.

College debt has exceeded $1 trillion and surpassed total credit-card debt, elevating the issue’s political importance, especially at a time when financially strained states are raising tuitions.

Democrats have proposed to offset the cost of subsidizing the lower interest rate by closing a loophole allowing some wealthy taxpayers to avoid Social Security and Medicare payroll taxes by classifying their pay as dividends, not cash income. Republicans first called instead for eliminating a fund for preventive health services in Mr. Obama’s health insurance law — a non-starter for the White House — but recently sent the president a letter proposing several alternative financing measures.

“And what has the White House done? Nothing. The president has yet to respond,” the Senate Republican leader, Senator Mitch McConnell, said in a speech on Thursday in advance of Mr. Obama’s arrival in Nevada. “One can only surmise that he’s delaying a solution so that he can fit in a few more campaign rallies with college students while pretending someone other than himself is delaying action.”

On Wednesday, the House speaker, John A. Boehner, and the House majority leader, Eric Cantor, called on Mr. Obama to cancel his Las Vegas speech. “With all of the great economic challenges facing our country, there is no reason to manufacture political fights where there is not policy disagreement,” they wrote to the president.

Asked about the Republicans’ complaints, the White House press secretary, Jay Carney, said aboard Air Force One to Nevada, “We are working with Congress to get this done and we think it will get done.”

Since April Mr. Obama has raised the interest rate issue and criticized Republicans for opposing his version at college campus events in North Carolina, Colorado and Iowa — all swing states.

Before flying to Nevada, Mr. Obama attended an outdoor breakfast fund-raiser, after two each on Thursday in San Francisco and Los Angeles. About 300 people paid at least $2,500 each to attend the event at a home in a predominantly African-American enclave on a hillside overlooking Los Angeles owned by Charles Quarles, president of the Bedford Group, a real estate development firm.