Senate Republicans led a successful effort to screw over 37 million Americans today by blocking a bill that would have moved student loan interest rates back to 3.4%
The Senate was voting to move forward on legislation that would have extended the previous 3.4% interest rate on subsidized student loans. The rollback of the interest rate would have been paid for by closing a tax loophole that benefits the wealthy. Champions of the left Bernie Sanders, Al Franken, and Elizabeth Warren voted in favor of moving the legislation forward, but it was far from enough as the final vote was 51-49.
On the Senate floor, Sen. Al Franken urged the Senate to move forward on the retroactive fix, “Let’s extend this for a year. This will put more pressure on us to do the reauthorization, to get it done.” Republicans are opposing a short term fix because they have their eyes on something similar to the variable rate interest scheme that passed the House. The House passed plan would permanently raise interest rates on student loans, and cost students an average of $6,000 more in interest.
The White House has chosen to support the Democratic bill over the bipartisan compromise being negotiated by Democratic caucus members Sens. Sens. Manchin, Carper, King that would mirror the House plan in tying student loan interest rates to 10 year Treasury Bonds, and it would only provide a limited cap on interest rates. (This bipartisan effort was part of the reason why the Senate vote wasn’t straight party line.) Manchin and King voted against moving forward. Majority Leader Harry Reid changed his vote to no in order to reserve the right to bring the bill back to the floor in the future.
The student loan standoff is a big deal because as of 2012, there were 37 million Americans who owed $870 billion in student loans. The amount of student loan debt in this country is larger than both credit card ($693 billion) and auto loan ( $730 billion) debt. The fact that Americans owe more debt for education than they do on their credit cards speaks volumes about the root problem.
Like the House passed bill, the compromise that is being negotiated by a group of senators takes a bad problem and makes it worse. Higher education is too expensive, and putting more doubt in the system with a variable interest rate scheme will only serve to create more future debt for students.
Once again, Senate Republicans showed how little they care about the American people. If the only other option is legislation that would create a system that could raise interest rates beyond the current 6.8%, borrowers would be better off if the Senate did nothing.
It shouldn’t come as a surprise to anyone that doing nothing appears to be exactly where this Senate is heading. Your interest rate has gone up because Senate Republicans don’t want to close a tax loophole that benefits the wealthy. It’s that simple, and it’s also very very wrong.