Senate remains gridlocked over student loan rates

The Senate failed to reach an agreement yesterday on how to stop the student loan interest rate from doubling in July.  

Without Congressional action, the federal student loan rate is scheduled to increase from 3.4% to 6.8% on July 1. About 7.4 million American students will be impacted by the rate increase, which could cost each student on average $1,000 more.

“With only 37 days left to stop student loan interest rates from doubling on July 1, Senate Republicans still have not proven that they’re serious about resolving this problem. For the second time this month, they voted to ask millions of students to pay an average of $1,000 each rather than close a loophole that allows the very wealthy to avoid paying their fair share. Now is not the time to refight old political battles, and certainly not the time to cut preventive health care measures,” according to a White House statement.

Read more: Student loan delinquency rate climbs above 20% 

Although both Democrats and Republicans agree that the student loan rate should not be raised, the two sides are divided over how to pay for the $6 billion it’ll cost to extend the current rate for another year.

Republicans want to offset the cost by eliminating the Prevention and Public Health Fund established by the health care reform law. The PPHF provides funding to train nurses, primary care doctors, mental health professions, to prevent and respond to infectious diseases that threaten public health, and to support programs that screen and treat diseases like diabetes, hepatitis, Alzheimer’s, and others.

Senate Amendment 2153, sponsored by Sen. Lamar Alexander (R-Tenn.), failed by a 34 to 62 vote.

Read more: Republicans filibuster Senate vote on student loan rates

“This 1-year solution, as I said, will save students about $7 a month on interest payments on their new loans, or about $83 a year. It will cost the taxpayers about $6 billion, which will be paid for by reductions in savings from the new health care law,” said Alexander.

The Democrat’s version, sponsored by Sen. Harry Reid (D-Nev.), received 51 votes, falling short of the 60 votes needed to overcome a filibuster and pass the Senate. Senate Bill 2343 – the “Stop the Student Loan Interest Rate Hike Act of 2012” – would pay for the costs by increasing taxes on S corporations.

“The Republican proposal is paid for by stripping Americans of life-saving preventive healthcare. The Democratic proposal is paid for by closing a loophole that allows wealthy Americans to dodge their taxes. It’s easy to see these two proposals were not created equal,” said Reid.


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3 Comments on “Senate remains gridlocked over student loan rates

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