Former Massachusetts Gov. Mitt Romney tried to deflate President Barack Obama’s student-loan bubble Monday by calling on Congress to extend a $5.6 billion per year subsidy to college grads.
“President Obama’s failed leadership on the economy has led to the weakest recovery since the Great Depression, where 50% of recent college graduates are unemployed or underemployed,” said a statement from Romney.
“I encourage Congress to temporarily extend the current low rate on subsidized undergraduate Stafford loans,” he said.
The announcement helps deflate Obama’s two-day tour to North Carolina, Colorado and Iowa, where he is expected to portray himself as a friend of students and their families. The tour begins Tuesday, and includes an interview on the Jimmy Fallon show.
Obama and his deputies have repeatedly called on Congress to extend a federal subsidy that lowers the interest rate to 3.4 percent on some government college-loans, dubbed Stafford loans.
Without the extension, the rate jumps back up to 6.8 percent, as required by a 2007 law passed by a Democratic-led Congress.
Many Republicans don’t want to extend the low interest rate, partly because it costs $5.6 billion a year, but also because it extends the government’s dominant role in the student loan business.
Banks were largely pushed out of the student-loan business by a 2010 law, leaving politicians with power to manipulate students’ lending and rates for political advantage.
White House spokesman Jay Carney on Monday derided GOP criticism of Obama’s economic and education policies, which have led to record debts and unemployment. For example, AP reported April 23 that 50 percent of recent graduates are unemployed or unemployed.
By preemptively accepting Obama’s demand, Romney denies Obama a campaign theme, reduces Obama’s appeal to students and their parents, and keeps the political campaign focused on the economy. (SEE ALSO: Under fire from Democrats, Romney says he actually supports Obama-signed ‘fair pay’ law)
“Ultimately, what young Americans want and need is a new president who will champion lasting and permanent policy changes that both address the rising cost of a college education and get our economy really growing again,” said Romney’s statement.