Low student loan interest rates in limbo after bill stalls in Senate
By Daniel Strauss - 05/08/12 12:29 PM ET

In a 52-45 vote, the Senate on Tuesday rejected a motion to proceed to legislation that would keep interest rates on federal student loans from doubling.

Sixty votes were needed to move to a debate on the legislation, but Democrats and Republicans were unable to reach a deal to prevent a GOP filibuster.

The failure leaves the Senate with an unclear path going forward on keeping the interest rates from doubling. If Congress does not take action the rate would rise from 3.4 percent to 6.8 percent on July 1.

President Obama has sought to turn the issue of student loans against Republicans, but the Senate's failure to move forward will make that much more difficult.

The House has already approved legislation that would keep the interest rate stable, though Obama has threatened to veto that measure. Obama supports extending the low interest loans, but opposes GOP cuts to a preventative care fund from the healthcare law that House Republicans would use to pay for their measure.
The legislation offered by Senate Democrats would pay for the $6 billion extension of low interest loans by closing tax loopholes on shareholders of S-corporations. Republicans are opposed to that pay-for.

The fact that the House has approved legislation to extend the low interest rates while the Democratically-controlled Senate has not plays to the GOP's advantage.

Speaker John Boehner (R-Ohio) last month accused the president of campaigning on the issue, and his spokesman Brendan Buck in a Twitter message noted that the tally on passing bills to keep student loans low is Republican House 1, Democratic Senate 0.

Earlier Tuesday morning, Senate Majority Leader Harry Reid (D-Nev.) offered to take up Republicans' alternative to the student loan legislation if they stopped threatening to filibuster the Democrats' bill. But as the noon vote approached, there appeared to be no deal between the parties.

On Tuesday, Sen. Mike Johanns (R-Neb.) said the Democrats' proposal "lacked reality."

Sen. Al Franken (D-Minn.), defending his party's plan, called the loophole "wrongheaded." Franken said that if this loophole couldn't be closed "there's no loophole that you can get rid of."

The vote went cleanly down party lines. All Democrats voted to move the bill forward while all Republicans voted against the bill except for Sen. Olympia Snowe (R-Maine) who voted present.

Reid initially voted to move the bill forward but then changed his vote to preserve his right under Senate rules to bring the legislation up again.

"Now that Schumer’s fake vote is behind us, we’re hoping Democrats will join Republicans in a real effort to fix the problem," a Senate Republican aide said after the vote.

Republicans argued that the Democrats' extension plan would hinder job creation.

While students are wracking up college debt, "they understand that at the same time Washington is piling up tremendous debt on students," Sen. Bob Corker (R-Tenn.) said.

Sen. Lamar Alexander (R-Tenn.), who sponsored a Senate version of the House student loan bill, urged his chamber to take up the legislation.

"Let's at least move the bill," Alexander said in reference to his legislation, ahead of the noon vote.

This story was updated at 12:57 p.m.

Low student loan interest rates in limbo after bill stalls in Senate - The Hill's Floor Action


Can't buy those votes today I guess!!!