If both parties want low rates on student loans, why the fight?

The GOP-led House is set to vote Friday on a bill to extend the low 3.4 percent interest rate on US-subsidized student loans. Obama wants that, too. But how to pay for it is kicking up dust in Congress.

Who's playing politics on student loans? Answer: everybody.

On July 1, interest rates on federally subsidized Stafford student loans, held by 7.4 million Americans, will double from 3.4 percent to 6.8 percent.

A little background: Last week, Democrats figured the pending rise in student loan rates would be an excellent way to needle Republicans and rouse a key constituency: young voters (and perhaps their tuition-paying parents, too). Democrats figured that Republicans would blanch at spending the $6 billion it would take to extend the lower loan rate for another year. Moreover, they could again score points off one of their big bogeymen – the House budget authored by Rep. Paul Ryan (R) of Wisconsin, which did not extend past July 1 the lower rate on student loans.

Then something funny happened: GOP presidential nominee Mitt Romney quickly endorsed an extension of the lower rates. That broke the Republican dam, and suddenly student loan rates were definitely not going to rise. 

"This is not a partisan issue," House Speaker John Boehner said Wednesday. "No one here expected that interest rates [on new student loans] were going to go up in July."

Mr. Boehner said the House would vote on a measure on Friday. That was a leap in front of Senate Democrats, who originally had pushed the issue. They slated the legislation for a vote sometime after next week's district work period for both houses.

So Democrats want the loan rates to stay low, and Republicans want the loan rates to stay low. What's the problem?

As with everything in Washington, the dispute is over how to pay for it. And that's where the yearning for low student loan rates runs headlong into electoral politics.

The Republican bill up for a House vote on Friday calls for raiding a prevention and public health provision of President Obama's health-care reform law. (The GOP-sanctioned term for this provision is a "health-care slush fund.") House Democrats, on the other hand, want to pay for the measure by ending tax subsidies for oil and gas companies.

In the Senate, Democrats would pay for the bill by closing what they call the Newt Gingrich/John Edwards loophole – a provision in the tax code that allows individuals who provide pricy "professional services" like consulting or legal services to avoid payroll taxes on large portions of their incomes. The tax law changes, which would apply to a subsection of companies known as S-Corps, would apply only to those with incomes over $250,000.

And there's the rub: Everybody wants the bill to pass, but everybody wants their partisan issue to help pay for it.

Boehner ripped Mr. Obama on Wednesday for campaigning on the issue.

But Speaker Boehner, a reporter asked, you tell the president to lay off the campaign rhetoric, but aren't you explicitly targeting youth voters with your proposal?

Boehner responded with a single word.

"Please."