On July 1, Stafford student loan rates for college students doubled to 6.8 percent after inaction from Congress. Senate Democrats attempted to pass a one-year extension of the rate cuts in a procedural vote Wednesday, but that measure came up nine votes short. Now Congress is down to the wire to bring rates back down to 3.4 percent before college students return to school in August.
The GOP-led House passed a plan to link interest rates to financial markets, but Senate Democrats don't want to take up this solution. Sen. Jack Reed argued that the plan "raises rates for everyone, eventually." Senate Majority Leader Harry Reid concurred: "Democrats can't support a plan that would be worse for students than doing nothing at all."
Democratic Sen. Tom Harkin, the chairman of the Health, Education, Labor, and Pensions committee, urged the Senate today to "put this over for a year . . . so we can address the full issue." He argued that since the Higher Education Act expires this year, "it will be upon us" to come up with a broader solution in the Spring. "Let's just extend this for one more year," he pleaded. "I hope that's not too much to ask." It was.
Republican Sen. Richard Burr argued against the Democrats' failed proposal:
This plan merely kicks the can down the road for 12 more months. We're going to vote on a 3.4 percent extension, kicking the can down the road and not finding a solution.
Harkin claimed that in the past election year "there just wasn't time to do anything" about student loan rates.