Despite the looming July 1 deadline, which will up the interest rate on federal student loans from the current 3.4 percent to 6.8 percent, both Senate bills addressing student loans failed during today’s vote. The Democrats' desired legislation failed to break a filibuster with 51-46 and the Republican version went down 40-57.
The Democrats' bill, sponsored by Sens. Jack Reed (D-R.I.) and Tom Harkin (D-Iowa), would have frozen the current interest rate of 3.4 percent on federal student loans for another two years. The GOP’s bill, sponsored by Sens. Tom Coburn (R-Okla.) and Lamar Alexander (R-Tenn.) was to put all Stafford, Graduate Plus, and Parent Plus loans at a 10-year U.S. Treasury borrowing rate with an additional 3 percentage points.
That both bills failed is certainly a surprise to many, especially since last year Congress was able to nail down a compromise and freeze the 3.4 percent rate. Furthermore, any hope of scrapping together an agreement before July 1 is almost certainly improbable, with the immigration reform bill, the farm bill, and the continued congressional investigations of the IRS, AP, Benghazi, and now the NSA scandals.
Sen. Tom Harkin (D-Iowa), despite being frustrated over the failure to pass a proposal, focused on the fact that there wasn’t enough time to create proper bill.
“In the next three weeks, we don’t have time to put together this longer term solution,” Harkin said at a press conference, mentioning several other bills that will take center stage, including immigration reform. He also said the debate over student loan interest should take place when the Senate takes on the Higher Education Act reauthorization, which will expire at the end of this year.
“We just haven’t had the time to be able to focus on this because of the other things that we have been working for,” Harkin said.
Sen. Elizabeth Warren (D-Mass.) never mentioned the lack of time, and sounded almost positive.
"This is what democracy is about. Where we go from here is what got us here today,” Warren said at the press conference. Later, in an interview with TAS, she was optimistic that public opinion would help.
“We’re going to keep pushing on this, we’ll keep fighting,” she said. “We’re counting on students and their families to help carry this one.”
The Republicans had similar frustrations, but they emphasized that their plan should have passed. Senate Minority Leader Mitch McConnell (R-Ky.) said it should have been a “slam dunk.” Sen. Coburn said in a press release:
Today’s vote put politics ahead of principle. The Senate could have enacted a permanent solution for students and their families, but instead played short-term politics. I will continue to work towards reform that ties interest rates to market forces and takes the process out of the hands of a Congress that routinely holds these rates hostage.
In the meantime, students can now look forward to doubled interest rates on their already-enormous loan debt.