(WASHINGTON) — Dueling groups of senators unveiled plans Thursday to prevent the increase in student loan rates, which is set to take place on July 1. Still, it is unlikely any plan will be enacted before the Senate heads leaves for their week-long recess on Friday.
A bi-partisan group of senators — Joe Manchin, D-W.Va., Angus King, I-Maine, Tom Coburn, R-Okla., Richard Burr, R-N.C., and Lamar Alexander, R-Tenn. — introduced the “Bipartisan Student Loan Certainty Act,” which would tie the interest rates on student loans to the 10-year Treasury note and adds an additional 1.85 percent to subsidized and unsubsidized undergraduate Stafford loans. The proposal adds 3.4 percent to the Treasury rate for graduate Stafford loans and 4.4 percent for PLUS loans, which are issued to parents of students.
“We’re tired of this being a political football,” Burr said in a news conference with the co-sponsors of the bill. “This is a responsible program from the standpoint of the American taxpayer.”
“We’re helping every student that needs a loan,” Manchin said. “This piece of legislation fixes all categories.”
A spokesman for Senate Majority Leader Harry Reid indicated Wednesday that the bill would not pass the Senate.
But a second group of Senators — all Democrats — are offering a separate plan called the “Keep Student Loans Affordable Act,” which would extend the current rate of 3.4 percent for one year, allowing the Senate to work on a long term solution over the next twelve months.
“The proposals that are on the table today would leave students worse off in the future frankly, worse off than simply allowing the interest rates to double,” Sen. Jack Reed, D-R.I., said on the Senate Floor Thursday. “We have to take action to stop the interest rates from doubling. Student loan debt is the next big financial crisis facing this country.”
The Democratic plan is sponsored by Sens. Reed, Kay Hagan, D-N.C., Tom Harkin, D-Iowa, Al Franken, D-Minn., Elizabeth Warren, D-Mass., and Debbie Stabenow, D-Mich.
But as the Senate’s week-long July 4 recess approaches, it is highly unlikely any plan will be enacted before the student loan rates double on July 1, meaning the Senate will have to come back after recess and try to retroactively pass a plan.
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