Federal student loan interest rates will double in the next few days, unless Congress can agree on a solution.
Republicans are adamant that the rate be linked to the financial markets, while Democrats would like Congress to set the rates. The prospect of a last-minute compromise seems unlikely.
US Secretary of Education Arne Duncan was in St. Louis Thursday, and told reporters that lawmakers are working on a compromise.
“I’ll say there’s a tremendous amount of activity – Republican, Democrat, House and Senate," Duncan said. "Lots and lots of calls yesterday. So people are working really, really hard and I remain hopeful that things will be resolved.”
If Congress doesn’t reach a deal by July 1, the interest rate on student loans will go from 3.4 percent to 6.8 percent.
Duncan was in St. Louis for an education talk, discussing (among other things) the President’s plan to expand preschool education.
The President’s “Preschool for All” plan would bring in about $50 million for Missouri in the first year. If the president’s plan comes to fruition, states would have to opt in to get the money, and pay a greater share as the program goes along.
It’s estimated that it would expand preschool to nearly 6,000 low and moderate income families statewide. Of course, Missouri Republicans aren’t exactly clamoring to accept federal money for Medicaid expansion.
“It’d absolutely be the state’s choice, so if Missouri didn’t want to accept the dollars (for preschool), that’d be fine," Duncan said. "I just know that as I travel the country, there’s a tremendous waiting list of children who don’t have access to early childhood education, and it’s the best investment a state can make.”
Duncan added that every dollar spent on early childhood education yields a return of $7 , and that Missouri not accepting the money would mean more for other states.
President Obama announced the proposal during the State of the Union. Duncan said he is very hopeful Congress will act on the plan.
Follow Chris McDaniel on Twitter: @csmcdaniel