WASHINGTON — President Barack Obama signed into law yesterday a measure restoring lower interest rates for student loans, pledging the hard-fought compromise would be just the first step in a broader, concerted fight to rein in the costs of a college education.
Encircled by lawmakers from both parties in the Oval Office, Obama praised Democrats and Republicans alike for agreeing — finally — on what he called a sensible, reasonable approach to student loans even as he cautioned that “our job is not done.”
“Feels good signing bills. I haven’t done this in a while,” Obama said, alluding to the difficulty he’s faced getting Congress, particularly the Republican-controlled House, to approve his legislative priorities, such as gun control and budget deals.
“Hint, hint,” he added to laughter.
But even the feel-good moment at the White House came with reminders of the bitter partisanship that still makes future deals incredibly difficult for Obama. House Speaker John Boehner, R-Ohio, called the law part of the “Republican jobs plan,” while House Democratic leader Nancy Pelosi of California said it “stands in stark contrast to the House Republicans’ plan to saddle families with billions more in student debt.”
The rare compromise emerged only after a frenzy of summer negotiations, with lawmakers at odds over how loan rates should be set in the future even while they agreed that a doubling of rates — it kicked in July 1 when Congress failed to act before the deadline — would be bad policy and bad news for students.
The legislation links student loan interest rates to the financial markets. It offers lower rates this fall because the government can borrow money cheaply at this time. If the economy improves in the coming years as expected, it will become more costly for the government to borrow money, and that cost would be passed on to students.