Senate Blocks Vote on Democrats’ Student Loan Bill

If an agreement can't be reached, subsidized Stafford student loan interest rates will double come July 1.

By Julianne Hing May 08, 2012

It was never going to be easy. But now the country will get another taste of just how hard it is to get anything done in Congress, this time with student loans. This afternoon Senate Republicans blocked Democrats’ attempts at stopping student loan interest rates from doubling come July 1. It was a largely symbolic move; the Democrats’ proposal in its current form had little chance of passing in the House. And Senate Majority Leader Harry Reid voted against advancing his bill, signaling that negotiations in the coming days could lead to another vote on the bill. Democrats and Republicans have filed separate bills that would postpone a scheduled interest rate increase on subsidized Stafford student loans. On July 1 the interest rate is set to double from 3.4 percent to 6.8 percent, which would add an extra $1,000 to students’ debt over their lifetime. Yet Republicans have suggested that their proposal be financed by slashing a preventative health program from President Obama’s healthcare overhaul, while Democrats have proposed funding the rate increase deferral with a tax increase on high-earners who own privately held corporations. Republicans are now demanding a vote on their proposal, the [AP]( reported.