GOP derails student-loan debate

Staff/wire reports

WASHINGTON

Senate Republicans derailed a Democratic bill Tuesday that would keep interest rates on federal college loans from doubling July 1 in an election-year battle aimed at the hearts — and votes — of millions of students and their parents.

Republicans said they favor preventing the interest-rate increase but blocked the Senate from debating the $6 billion measure because they oppose how Democrats would pay for it: boosting Social Security and Medicare payroll taxes on high-earning stockholders of some privately owned corporations.

GOP senators want a vote on their own version heading off the interest-rate increases and paid for by eliminating a preventive- health fund created by President Barack Obama’s 2010 health-care overhaul. That financing idea has no chance of passing the Democratic-run Senate and has drawn a veto threat from the White House.

Tuesday’s vote was 52-45 in favor of starting debate on the Democratic legislation — eight votes shy of the 60 needed. Senate Majority Leader Harry Reid, D-Nev., was the only one to defect his party’s position, a procedural move that will allow him to have the vote again should the two sides work out a deal later.

The vote was largely symbolic because the Democratic bill had no chance of approval by the GOP-led House.

The measure would extend today’s 3.4 percent interest rate on subsidized Stafford loans for another year. Those rates would grow to 6.8 percent without congressional action, thanks to a 2007 law that gradually lowered those rates but expires July 1.

During a stop at the State University of New York in Albany, Obama tried raising pressure on lawmakers to act.

“Before they do anything else, Congress needs to keep student-loan rates from doubling for students who are here and all across the country,” he said. He added, “Don’t let politics get in the way. Get this done before July 1.”

Youngstown State University President Cynthia Anderson on Tuesday expressed her “strong support for maintaining affordable interest rates for Stafford loans. The presidents of Ohio’s public universities have sent letters to U.S. Sens. Rob Portman and Sherrod Brown requesting their support for legislation that would extend the 3.4 percent interest rates on the loans.

“The doubling of the interest rates would present a hardship to the nearly 8 million students throughout the nation who hold Stafford loans, including about 75 percent of Youngstown State University students,” Anderson said. “I join with my colleagues across the state in asking Sens. Portman and Brown to assist us in continuing to support our nation’s youth by maintaining present interest rates on these loans.”

Brown said, “This fight is far from over.”

He added, “I will continue working for Ohio’s college students and middle-class families to ensure that they won’t have to pay more for their student loans come July.”

Allowing interest rates to double “is a step backwards,” Brown said.

Both parties know full well that they will need a bipartisan pact on financing the measure. They both are motivated to strike such an agreement because in the months before this November’s presidential and congressional elections, neither wants to be blamed for letting college costs grow for students and their families struggling in today’s weak economy.