Efforts by both parties to block student loan rates from doubling on July 1 failed in a vote on Thursday in the Senate, with the Democratic measure failing to break filibuster in a vote of 51-46 and the Republican-backed bill failing in a 40-57 vote.
The competing initiatives are aimed at creating an alternative to an automatic rate increase on federal student loans, which will double interest rates from 3.4 percent interest to 6.8 percent in less than a month if Congress continues to fail to act. The Republican proposal (S. 1003), sponsored by Sens. Tom Coburn (R-OK), Richard Burr (R-NC) and Lamar Alexander (R-TN), aimed to peg student loan interest rates to the market-based 10-year Tresasury note (currently 2.14), plus 3 percent. The Democrats’ proposal (S. 953), sponsored by Sens. Tom Harkin (D-IA) and Jack Reed (D-RI) would simply continue the 3.4 interest rates for two years until Congress can pass more comprehensive student loan reform.
The Democrats’ bill also folded in modified requirements for the distribution of pensions as well as amendments to the Oil Spill Liability Trust Fund.
Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, along with Vice President Nancy Zirkin, released a statement endorsing the Democrats’ proposal:
The Leadership Conference believes Congress must enact and fund programs that ensure that all Americans have access to affordable postsecondary education. S. 953 will keep college affordable by maintaining the current 3.4 percent interest rate on subsidized Federal Direct Stafford Loans for two years by closing tax loopholes for the oil industry, non-U.S. companies, and in the distribution of tax-deferred accounts. We support S. 953 because it protects students and is a sensible and workable interim measure as Congress begins to tackle the reauthorization of the Higher Education Act later this year and consider a comprehensive overhaul of federal student aid programs.
Jim Dean, the chair of Democracy for America, also released a statement. “While the Senate’s failure to pass student loan reform less than 24 days before the July 1st deadline is disturbing, it’s also an opportunity for Senators to pass legislation that actually would work to end the growing student debt crisis: Elizabeth Warren’s Bank on Student Loan Fairness Act, which would prevent both the doubling of student loan rates and ensure that students don’t pay more for their loans than the big Wall Street banks who helped wreck our economy,” he said. “The time for timidity is over, the crushing weight of student debt has reached crisis proportions and Democracy for America’s 1 million members are committed to fighting for truly meaningful student loan reform till the very end.”
It’s unclear if any further proposals will be brought to a vote before the July 1 deadline.
[“Stock Photo: Angry Student Girl With Learning Difficulties. Isolated On White Background” on Shutterstock]