President Obama calls on Congress to address student loan interest rate before it doubles July 1

President Barack Obama is calling on Congress to extend the interest rate on subsidized student loans before it doubles at the end of the month and leaves millions of student borrowers paying up to $1,000 in additional fees next year. Flanked by college students a White House speech on Friday, Obama said Congress should extend the current rate of 3.4 percent. If Congress fails to act, the rates for Stafford student loans will double to 6.8 percent July 1. That increase would equate to about a $1,000 more in interest payments for most borrowers. "Higher education cannot be a luxury for a privileged few. It is an economic necessity that every family should be able to afford, every young person with dreams and ambition should be able to access," Obama said as he urged students to contact their representatives about pending deadline. The House has already passed a measure to address the increase, tying the student loan rates to interest rates on Treasury notes. That change would mean an annual increase for subsidized loan recipients, many of whom are from low to middle-income families. An earlier plan introduced by Obama also ties the student loan interest rate to the Treasury note but would lock it in for the life of the loan. "I'm glad that (the House) took action, but their bill does not meet that test. It fails to lock in low rates for students next year," the president said. "The House bill isn't smart, and it's not fair." Senate Majority Leader Mitch McConnell, R-Ky., said he was glad the president was in agreement on the need to provide a permanent solution to the problem of increased interest rates on student loans but blasted the White House press conference. "No one should be fooled by (the) campaign-style event at the White House. House Republicans have already passed legislation that would prevent a rate hike, and Senate Republicans have proposed a solution similar to one the president himself called for in this year's budget," McConnell said. "Unfortunately, the president appears more interested in needlessly stoking partisan divisions in Washington than helping young Americans avoid a higher interest rate on their student loans." Majority Leader Harry Reid, D-Nev., said the Senate will vote next week on a Democratic plan to extend the 3.4 interest rate for two years until a permanent solution can be worked out.