Senate Democrats’ student loan bill goes nowhere

posted at 6:01 pm on May 8, 2012 by Erika Johnsen

The debate about maintaining the ceiling on some federal student loan interest rates was President Obama’s flavor-of-the-week campaign meme two weeks ago, but the Congressional kerfuffle continues. Although the interest-rate hike would actually affect relatively very few student loan recipients, the White House succeeded in generating quite the to-do over the debate — and here we are in legislative limbo yet again. A quick review:

The House already passed their own bill to stay the interest rate on Subsidized Stafford loans, set to double from 3.4 to 6.8 percent, for one more year, but President Obama threatened a veto. The GOP version would cut the Prevention and Public Health Fund, a program created as a part of ObamaCare, to pay for the bill, a measure that the White House deemed a “politically-motivated proposal and not the serious response that the problem facing America’s college students deserves.”

Then the Senate introduced their own version of a bill, which, as Ed explained, drew the Senate GOP’s ire because it would effectively raise taxes on millions of small businesses. The vote earlier today went cleanly down party lines, meaning that Democrats did not win the sixty votes necessary to move to debate and prevent a GOP filibuster:

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. …

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. …

“Unfortunately, it appears that Republicans appear more interested in obstruction than progress,” [Reid] said in a statement.

So, wither the student loan distraction — er, I mean — debate? I find myself inclined to agree with Sen. Marco Rubio (R-FL) in an op-ed he wrote this morning: we need to stay focused on fixing the economy. This trumped-up issue wouldn’t be an issue if graduating college students had any good jobs to go to:

Fortunately, there is a solution to this, but its primary obstacle will be election year politics.  The issue will test President Obama and how badly he wants to exploit rising student loan debt for his own political gain.

…The president should also stop avoiding the real elephant in the room. Clearly, people with student loans have already been struggling for years and even if a student loan rate increase is averted, people will still face the more daunting challenge of a stagnant job market that the president’s policies are only making worse.


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