President Barack Obama signed into law the last-minute bipartisan bill, HR 4348, that will keep student loan interest rates from doubling. The law will also extend funding for transportation construction projects for another two years and extend national flood insurance.
Congress barely made the July 1 deadline, risking a student loan rate rise for summer students, but the president signed another bill that temporarily prevented rates from rising until he had the chance to approve the bill.
Obama said the law was part of his efforts to get congress to do more “nation-building.” He said the funding for construction projects on national infrastructure would create much-needed jobs to address the nation’s central economic crisis. He said he wants to use more of the funding no longer needed to make war overseas to make improvements “here at home.”
“I’ve been asking [Congress] to help us give two million Americans the opportunity to learn the skills that businesses in their area are looking for — right now — through partnerships between community colleges and employers,” said Obama.
He said keeping student loan rates low was vital, and he wants to continue to work with Congress on financial aid, because, “In America, a higher education cannot be a luxury reserved for just a privileged few. It’s an economic necessity that every American family should be able to afford.”
The law will allocate about $100 billion for transportation spending over the next two years.
Democrats compromised by allowing states more control over how they will spend the money, instead of requiring certain types of development, like bike paths.
Republicans compromised by allowing the Democrats to exclude a fourth part of the bill; the Keystone Pipeline project and restrictions on the EPA did not make the cut.
Congress settled on how the loan rate extension and transportation funding would find funding. The law extended gasoline and diesel taxes another two years, a tax to help pay for highways. To help pay for low student loan rates, the law only allows Stafford student loan interest subsidization up to six years after beginning school, rather than subsidizing interest on the loans as long as borrowers are in school. Also, Congress cut tax deductions companies can make for pension contributions and increased fees on federal pension insurance. National flood insurance premiums will help pay for the bill too.
The Congressional Budget Office estimated the law will reduce the deficit by about $16 billion over the next decade. The Taxpayers for Common Sense estimated a deficit increase of about $14 billion.