Psst, students. Still hope for low-rate student loans, despite Senate balking
Without a fix, interest on some subsidized federal student loans would double to 6.8 percent starting July 1. But Thursday's Senate votes are still just theater. Expect parties to haggle over the cash until June 29.
Washington — With interest rates on certain student loans set to double on July 1, the Senate channeled its inner college student by pulling the legislative equivalent of picking up an Xbox controller or logging into Facebook.
That is, the senators procrastinated in the face of an impending deadline.
The Senate was looking to "express itself" on the student loan issue on Thursday, as minority leader Mitch McConnell (R) of Kentucky put it the day prior. What senators expressed was a willingness to put actual work on student loan rates aside until at least after next week's district work period, as senators rejected both the Democratic and Republican options for picking up the $6 billion tab for extending low interest rates another year.
Without a congressional fix, interest on some subsidized federal loans would double to 6.8 percent starting in July. That's an outcome that neither party – and neither presidential nominee – says is desirable. Yet the parties can't decide how to come up with the cash to pay for keeping the rate low.
By allowing votes on both doomed measures, Senate Democrats nudged the student loan debate incrementally forward: Republicans blocked a vote on the Democratic proposal that would generate $6 billion by closing a payroll-tax loophole for a certain subsection of corporations, earlier in the month.
“We already know how this story ends," Senator McConnell said earlier in the day. "So why are Democrats forcing us to vote on their failed proposal yet again? Because, as I’ve said, they’re more interested in drawing our opposition – and of creating a bad guy – than in actually solving the problem."
By voting on both proposals, however, Republicans will be on record as voting for a proposal to cap student loan interest rates (paid for by raiding a preventive health-care fund), as well as voting against one, netting out any nettlesome political effects.
The Republican bill fell 34 to 62, while the Democratic proposal landed at 51 to 43, short of the 60 votes needed for passage.
The student loan votes capped a long day (by Senate standards), as the senators voted on some dozen amendments to a bill reauthorizing the Food and Drug Administration's authority to collect user fees to fund its review of drugs and medical devices. The FDA bill passed nearly unanimously, 96 to 1.
Then, senators turned their attention to whacking both student loan measures before high-tailing it out of town for the Memorial Day holiday and a week in their home states.
When they return, the Senate will face a rare full month of work in Washington, with issues including a farm bill, flood insurance legislation, small business tax relief, cybersecurity, and pay fairness for women on the agenda.
And then there are those pesky student loans which, as David Hawkings of Capitol Hill news group CQ wrote, "already looks like the get-out-of-town vote on June 29."