By NEMS Daily Journal
Senate Democrats tried and failed Tuesday to move forward a student loan interest bill with a rate subsidy funded by new taxes to hold Stafford student loans at 3.4 percent interest.
The measure, funded by narrowly focused higher taxes for Social Security and Medicare, failed on a debate-limiting vote, 52-45. It needed 60 votes for passage.
It’s expected that a GOP version – passed by the House – of a guarantee funded by taking money from an Obama administration health care reform will be voted on – and voted down – today.
Reuters News Service reported this week that neither side has enough votes for passage. It reported that many inside the Capitol expect negotiations when political posturing concludes.
Wire service and Capitol insider sources have said a prolonged negotiation is ahead among leaders in both parties because nobody wants a rate jump from 3.4 to 6.8 percent rate affecting millions of students in an election year.
The House, with support of 1st District Republican Alan Nunnelee, voted April 27 for the GOP version.
Sens. Thad Cochran and Roger Wicker, both Republicans, voted Tuesday against cloture on the Democratic plan.
The 3.4 percent rate is supported by a 2007 law and formula expiring on July 1. If not extended, the loan rate jumps – becoming much more costly for students.
The higher rate would not apply to loans already in force, but would apply to all new loans under the so-called Stafford plan for low- and middle-income students. The higher rates, should they occur, would only affect students taking out new loans starting July 1.
Reuters reported that about 7.4 million students could be affected with $31.6 million in loans at stake.
Aides to members of Congress have said they expect negotiations as soon as the preliminary voting and politics conclude.
We agree with all those who want bipartisanship to control the outcome.
Students and their need for borrowed money to go to college and on to graduate school have been obscured in the debate. On this issue nobody should remain an obstructionist.
Greg Valliere of the Potomac Research Group, a private firm that tracks Congress for investors, told Reuters, “Congress will get a deal because the political consequences of not getting a deal would be huge with younger voters.”
Both sides have leveled accusations, but both President Obama and Speaker John Boehner, R-Ohio, want the rate maintained. In this case, the federal role is essential.