Associated Press
President Barack Obama greets students after he called on Congress to stop interest rates on student loans from doubling next month during a news conference in the East Room of the White House in Washington, Thursday, June 21, 2012.
The only reason this issue isn't already resolved — the only reason — is that the president wants to keep it alive. —Senate Minority Leader Mitch McConnell

Calling a freeze on interest rates for student loans a "no-brainer" in the face of pending hikes, President Barack Obama urged students and parents to press for Congressional action to stop the rates from doubling when the July 1 deadline hits.

"There's 10 days for Congress to do the right thing," Obama said. "I understand that members of Congress in both parties say they want to get this done and there are conversations taking place. But they haven't done it yet, and we've got to keep the pressure on."

Without Congressional action, today's 3.4 percent interest rate on subsidized Stafford loans would rise to 6.8 percent. The hike would only affect new applicants.

The extension's $6 billion price tag has led to disagreements between Republicans and Democrats on how to fund such a move. In May, a Democratic bill failed in the Senate, eight votes short of the 60 needed to start debate. In April, House Republicans passed the Interest Rate Reduction Act (H.R. 4628) and sent the bill to the Senate, where it has been placed on the Senate Legislative Calendar under General Orders.

Senate Minority Leader Mitch McConnell, R-Ky., said Obama's speech Thursday was an attempt to distract voters from the real situation.

"The Republican-led House of Representatives has already passed a bill that would solve this problem," McConnell said. "This is just another sad example of his election-year strategy of deflection and distraction. College graduates are struggling to find work and pay their bills in the Obama economy ... He'd like them to believe it's somebody else's fault."

The Republican bill currently in the Senate would pay for the bill by cutting funding for a preventative health care program that was created by Obama's health care overhaul. Democrats have called the cuts unacceptable, although the president proposed cutting the same fund in his 2013 budget.

The Washington Post reports that Senate Majority leader Harry Reid, D-Nev., has proposed paying for the loan rate freeze by raising the premiums companies pay for pension insurance. The failed Senate bill fought to raise payroll taxes on high-earning stockholders of some privately owned corporations in order to fund the freeze.

Republicans recently sent Obama and Democrats a letter laying out two other possible ways to pay for a one-year extension of the 3.4 percent loan rate. The first suggestion was a 1.2 percent increase in federal employee retirement contributions that would cut $8 billion from the deficit by 2017. The second proposal was a combination of limiting the length of the interest subsidy to the periods students are in school, lowering the threshold for taxing Medicaid providers and improving the collection of pension information from states and localities to prevent overpayment.

"The policies in both options are either policies that you recommended in their entirety or a subset of a policy you recommended. We are prepared to support either option," the letter said. "There is no reason we cannot quickly and in a bipartisan manner enact fiscally responsible legislation."

In a June 5 interview, Education Secretary Arne Duncan said the administration is ready and willing to work with Republicans, but added a caveat on funding proposals.

"If they are not serious proposals, they are not ones we will take seriously," Duncan said. "We hope and expect Republicans to work with us — not to talk abut it, but to fix it."

"Congress has had the time to fix (this issue) for months," Obama said Thursday. "It's part of the reason why everybody here looks impatient. This issue didn't come out of nowhere. It's been looming for months."

During Thursday's White House press briefing, spokesman Jay Carney said the White House remains engaged with Congress in an effort to pass the legislation.

"It obviously requires both parties to get this done," he said.

"The only reason this issue isn't already resolved — the only reason — is that the president wants to keep it alive," McConnell countered from the Senate floor Thursday. "He thinks it benefits him politically for college students to believe we're the problem."

In an op-ed piece at The Hill, former Deputy Secreaty of Education Eugene Hickok wrote that the focus on the Stafford Loan interest rate is misdirected.

"Holding the Stafford Loan interest rate at 3.4 percent only applies to about 30 percent of college students. For those who do qualify, the increased interest rate would average about $8 a month. That's pocket change compared to the costs imposed on students, institutions and taxpayers by antiquated business practices that are long overdue for reform," he wrote. "Rather than narrowly focusing on interest rates and vote capturing, policy makers should step back and consider new, simple ways to move the needle on the high cost of education and the troubles that come with it."