As Standoff Continues, Senate to Vote on Student Loans
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iStockphoto/Thinkstock(WASHINGTON) — Interest rates on subsidized student loans have doubled, but Congress has shown no signs that it will send a fix to the president’s desk any time soon.
Republicans and Democrats have yet to reach an agreement on what to do about the higher new student loan rates, which kicked in last week as lawmakers spent their Fourth of July recess barbecuing, attending parades, and meeting with constituents in their home states and districts.
Stafford loans’ original interest rate was 6.8 percent, but in recent years the government subsidized those rates for low-income students, holding them to 3.4 percent. Now, they’ve returned to 6.8 percent.
On Wednesday, the Senate will vote on the Democrats’ preferred plan — a one-year, retroactive fix that would keep rates at 3.4 percent on loans made from July 1, 2013, to June 30, 2014.
The vote will be procedural; it will not be on the bill itself. It will need 60 votes to advance.
Senate Republicans have offered up their own bill, which would tie student-loan rates to 10-year Treasury bonds, a permanent fix that would not, however, cap interest rates for new loans in future years. The GOP-backed bill does cap consolidated loans at 8.25 percent interest in future years.
That proposal has gained the support of a handful of Democrats — Sens. Joe Manchin, D-W.Va. and Tom Carper, D-Del.; and Angus King, I-Maine, who caucuses with Democrats — meaning 60 votes could be a high hurdle for the one-year fix, without those senators on board.
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