WASHINGTON — The July 1 date for federal student loan interest rates to double in Louisiana and the rest of the nation is still looming as federal legislation to keep the lower rates stalled Tuesday in the Senate on a party-line vote.
Needing 60 votes to prevent a GOP filibuster, the Senate voted 52-45 in a failed effort to move forward with the legislation that would keep the Stafford loan interest rates at 3.4 percent.
The Senate legislation would pay for the $6 billion lowered rate extension by closing tax loopholes on certain corporations, a move that Republicans oppose.
The House-passed version of the legislation pays for the extension by taking the money from a preventive care fund that is part of President Barack Obama’s health-care law. Obama has already threatened to veto the U.S. House bill.
Obama has made the lowered student loan rates a key re-election campaign issue the last couple of weeks and presumptive GOP president nominee Mitt Romney has also said he wants to keep the rates down.
The interest rates on Stafford loans were lowered from 6.8 percent to 3.4 percent five years ago. But the lower rate expires after June and would return to the interest rate of 6.8 percent for students taking new loans out this fall.
Those with current Stafford loans would not be affected unless students take out new loans.
Extending the lower Stafford loan rate would save $79 million for 83,243 Louisiana residents expected to take out the loans, according to White House figures. That makes for an average savings of $949 per student.
Sen. Mary Landrieu, D-La., expressed her disappointment in the Republican opposition in the Senate. She stated that affordable college loans can often mean the “difference between a promising career and a life of hardship.”
“While Senate Democrats are willing to start debate on this bill to find a bipartisan solution, it is unfortunate that our Republican colleagues chose to block its consideration entirely — all the while continuing to push tax breaks for people who make more than $1 million a year,” Landrieu said in a prepared statement. “This is a burden that middle class students — whose education is critical to the future success of our country — shouldn’t be forced to carry.”
Sen. David Vitter, R-La., expressed support for keeping the rates low, but not through the method proposed by Senate Democrats.
“We certainly want to make college affordable and keep interest rates low for student loans, but (Senate Majority Leader) Harry Reid wanted to pay for it by taxing small businesses, and we can do better than that,” Vitter stated. “I share concerns with many Louisiana parents that the biggest problem our college students face is finding a job when they graduate, and many of us have urged the Senate leadership to put their focus on job creation — instead of punishing job creators.”
Reid and other Democrats also called Tuesday on Romney to get more involved in pressuring Republicans to support the legislation.
Meanwhile, White House Press Secretary Jay Carney kept the pressure on Republicans on Tuesday.
“We’re pleased that, despite failing to address it in their budget, Republicans in Congress now profess to be concerned about this coming rate hike,” Carney said in the White House release.
“But now it’s time for them to stop refighting old political battles and prove they’re serious by proposing a real solution to keep rates low for students without burdening middle-class families or undercutting preventive health care for women.”
Carney also said 7.4 million Americans nationwide would be affected if Republicans are too determined “to protect a loophole that allows millionaires to dodge payroll taxes.”
Republicans have accused Obama of picking up on the issue purely for the sake of his re-election campaign.