WASHINGTON — The defeat of a student loan bill in the Senate on Wednesday clears the way for fresh negotiations to restore lower rates, but lawmakers are racing the clock before millions of students return to campus next month to
WASHINGTON — The defeat of a student loan bill in the Senate on Wednesday clears the way for fresh negotiations to restore lower rates, but lawmakers are racing the clock before millions of students return to campus next month to find borrowing terms twice as high as when school let out.
Republicans and a few Democrats blocked a White House-backed proposal that would have restored 3.4 percent interest rates on subsidized Stafford loans for one more year. The failed stopgap measure was designed to give lawmakers time to take up comprehensive college affordability legislation and dodge 6.8 percent interest rates on new loans.
Without action in the coming weeks, the increase could mean an extra $2,600 for an average student returning to campus this fall, according to Congress’ Joint Economic Committee.
“Let’s just extend this for one year. I don’t think that’s too much to ask,” said Democratic Sen. Tom Harkin of Iowa, chairman of the Senate Health, Education, Labor and Pensions Committee.
It proved too much for a bipartisan group of lawmakers, led by Sen. Joe Manchin, D-W.Va. They favored a compromise now and joined with Republicans in using a procedural roadblock to stop the one-year patch.
“This plan merely kicks the can down the road for 12 more months,” said Sen. Richard Burr, R-N.C., who worked with Manchin and Sen. Angus King, I-Maine, on a deal that linked interest rates to financial markets. “We’re going to vote on a 3.4 percent extension, kicking the can down the road and not finding a solution,”
The Senate vote was 51-49, nine votes short of the 60 votes needed to move forward.
The Republican-favored plan that Manchin helped to write was not considered for a vote in the Democratic-controlled Senate.
But that proposal was the subject of an evening session among leaders from both parties about next steps. That session in Democratic Sen. Dick Durbin’s office included liberal lawmakers, including Harkin, who previously refused to consider the Manchin-led proposal.
The talks could yield a compromise that could be announced as early as today.
