Senate Republicans succeeded Tuesday in blocking a bill that would have prevented student loan interest rates from doubling on July 1.
The bill, introduced by Senate Majority Leader Harry Reid (D-Nev.), needed a 60-vote supermajority to proceed to debate. But a party-line vote of 52-45 prevented the measure from reaching the Senate floor.
Both parties agree that interest rates on federally-subsidized Stafford loans should be frozen for another year. But since the freeze would cost the government $6 billion, a partisan debate has begun on how to fund the measure.
Democrats want to close payroll and Medicare tax loopholes on high-earning shareholders in S-corporations, a funding plan that was a part of the Senate bill. Republicans have a bill in the House that would pay for the interest rate freeze by eliminating a preventive care program enacted by 2010’s healthcare reform bill.
Reid said Tuesday that the vote showed that Republicans are “more interested still in obstructionism rather than progress” and said Democrats would not slash the health fund, which pays for cancer screenings, diabetes prevention and other basic medical needs.
Senate Minority Leader Mitch McConnell (R-Ky.) called the issue a manufactured crisis. “The best way to resolve this would be to sit down and discuss the way to resolve the differences between the House and Senate and pass it,” he said.
Interest rates on Stafford loans have been kept at an artificially-low 3.4 percent through an interest-rate freeze slated to expire July 1. If the freeze is not renewed, interest rates on student loans will jump to 6.8 percent for about 7.4 million borrowers.