The Spectacle Blog

Senate Rejects Another Student Loan Bill

By on 7.10.13 | 3:51PM

The Senate once again failed to pass legislation that would address the doubled interest rates on subsidized Stafford loans on Wednesday, with Sen. Harry Reid’s cloture vote to proceed failing 51-49.

The bill, the Keep Student Loans Affordable Act of 2013 (S. 1238), was the Democrats' latest attempt to return the subsidized Stafford loan interest rates to 3.4 percent from the current 6.8 percent. It would have kept the rates at 3.4 percent for another year.

Before the vote, Senators Joe Manchin (D-W.V.) and Richard Burr (R-N.C.) tried unsuccessfully to bring their latest bill, the Bipartisan Student Loan Certainty Act, to the floor. The bill would set interest rates at the 10-year treasury rate plus 1.85 percent for subsidized and unsubsidized undergraduate Stafford loans, plus 3.4 percent for graduate Stafford loans, and plus 4.4 percent for PLUS loans. It would be a fixed interest rate for the life of the loan and consolidated loans would have an 8.25 percent cap.

Sen. Mike Enzi (R-Wy.) said the Democrats' plan was to watch the bill fail in Congress so they can blame the Republicans, and then use the doubled interest rates to finance the Affordable Care Act.

“This isn’t supposed to be a blame game around here, this is supposed to be finding some common ground and getting things done,” Enzi said. “And I think there is some common ground, otherwise there wouldn’t be Democrats joining the Republicans on a bill that they propose.”

The Democrats, however, continued to pitch subsidized interest rates and stall for a long-term solution.

“We have the opportunity to do no harm, and then work together on something comprehensible that does not, down the road, have students paying seven, eight, nine or in the case of the bill in the House, they top out one of their rates at 10 1/2 percent,” said Sen. Debbie Stabenow (D-Mich.).

But Republicans insisted that they won’t vote for a temporary solution.

"This plan merely kicks the can down the road for 12 more months," said Sen. Richard Burr (R-N.C.) "We're going to vote on a 3.4 percent extension, kicking the can down the road and not finding a solution."

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