Photo: Gage Skidmore | Flickr
Senate Republicans just voted to block a bill that would keep federally subsidized student loan rates from doubling next year, virtually ensuring that college loans will continue to be a key issue during the 2012 presidential campaign. The Senate voted along party lines — 52 to 45 — to block the vote, denying Democrats the 60-vote majority they needed to even start debate on the bill. While both parties agree that the rates should remain low, lawmakers remain deadlocked over how to pay for the plan.
The Senate bill would pay for the loan-rate extension by ending tax breaks for “S Corporations,” or companies that have three or fewer shareholders. House Republicans passed a plan last month that would pay for the lower rates by cutting $6 billion from a preventative healthcare fund included in the Obamacare legislation. Senate Republicans want to hold a vote on that plan, but Senate Democrats have blocked the proposal.
Lawmakers now have until July 1, when the student loan rates expire, to work out a compromise. If they don’t vote to reauthorize the lower rates, roughly 7 million borrowers will see their student loan rates go from 3.4% to 6.8%.
The student loan plan has become a key talking point for President Barack Obama as he launches his 2012 re-election campaign. His Republican opponent Mitt Romney has also said he supports an extension of the lower interest rates, but has so far failed to say how he thinks the lower rate reauthorization should be paid for. And at a town hall in Ohio yesterday, he told students that “The answer is not to say let’s have the federal government give unlimited loans, no interest to everybody who wants them.”
“By the way, you’re going to hear that. In an effort to try to and reengage college students and graduate students to get involved in the Obama campaign, and they’re pulling back, obviously, they’re not as enthusiastic as they were,” Romney said, according to ABC News. “In an effort to try to get them engaged, he’s going to promise to give a lot of free stuff to them. And to say, I’ll pay for your education, or I’ll get rid of the loans.”
The Obama campaign is hitting Romney for trying to moderate his stance on the issue today. In a research memo obtained by Politico, the campaign slams the former Massachusetts Governor for telling college students to “shop around” for lower college prices, and attacks him for supporting Rep. Paul Ryan’s budget plan, which would cut Pell Grants.
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