Senate to try again on student loan vote - KTTC Rochester, Austin, Mason City News, Weather and Sports

Senate to try again on student loan vote

Posted:

WASHINGTON (AP) -- Senate Democrats are trying to restore lower interest rates on student loans, a week after Congress' inaction caused those rates to double.

A procedural vote is scheduled for Wednesday on a Senate measure that would return rates on subsidized Stafford loans to 3.4 percent for one year. An earlier attempt in the Senate to keep rates low came up short and rates for those loans doubled to 6.8 percent on July 1.

The increase did not affect many students right away; loan documents are generally signed just before students return to campus, and few students returned to school over the July Fourth holiday. Existing loans were not affected, either.

However, absent congressional action in the coming weeks, the increase could spell an extra $2,600 for an average student returning to campus this fall, according to Congress' Joint Economic Committee. Lawmakers from both parties have criticized the increase and the costs passed to students, but there is little agreement on how to restore the lower rates.

"It's not fair for Democrats who run Washington to stand in students' way," said Rep. Cathy McMorris Rodgers of Washington state, a member of the House GOP leadership.

Countered Democratic Sen. Jack Reed of Rhode Island, "The Republican proposals are attractive in the short term but in the long term are extremely expensive."

During last year's presidential campaign, lawmakers from both parties voted to keep interest rates on subsidized Stafford loans at 3.4 percent. Yet this year, without a presidential election looming, the issue seemed to fizzle and the July 1 deadline passed without action.

Most Democratic senators favored keeping the rates at 3.4 percent for now and including a broad overhaul of federal student loans in the Higher Education Act rewrite lawmakers expect to take up this fall. Sen. Al Franken, D-Minn., said the matter needs to be viewed in a holistic way.

"How are we going to address the costs of college? How are we going to make college more affordable for our kids?" Franken said.

Yet an earlier Democratic attempt at a two-year extension failed to overcome a procedural hurdle before lawmakers left for the July Fourth holiday. Under Senate rules, 60 votes are needed to let the proposal go forward and Democrats alone cannot force it ahead.

A one-year extension seemed heading toward the same fate.

"What is good about a short-term political fix?" said Sen. Lamar Alexander of Tennessee, the top Republican on the Senate Education Committee.

Efforts to find a compromise seemed heading nowhere as well. Democratic Sen. Joe Manchin of West Virginia worked with Alexander to write a bipartisan bill that closely follows a bill the GOP-led House has already passed. That bill incorporated an idea that was included in President Barack Obama's budget to link interest rates to the financial markets.

Under the House plan, interest rates would be lower in the next few years but rise as the economy improves.

"That is not fair to students and it is certainly not good for our economy," said Sen. Patty Murray, D-Wash.

The Democratic chairman of the Education Committee, Sen. Tom Harkin of Iowa, also said the GOP proposal was not an option and stood opposed to considering it this summer. Instead, he insisted on a one-year extension of the current rates.

"Congress has an imperative to pass a plan to keep rates low now so that students and families struggling to afford college can count on affordable federal student loans," Harkin said.

Without an agreement, though, students are facing 6.8 percent interest rates on new subsidized Stafford loans, which typically go to students from lower- and middle-income families.

That is unacceptable, said Sen. Debbie Stabenow, D-Mich. "You can go out and get a car loan for 4 percent," she said.

Despite the widespread agreement that the current 6.8 percent interest rate is too high for students, there is little consensus on what to do.

House Speaker John Boehner, R-Ohio, has remained adamant that the chamber he leads has already taken action and it's up to the Senate to fall in line.

"Republicans have acted to stop student loans' interest rates from doubling," Boehner said. "The House has done its job. It's time for the Senate and the White House to do its job."

Senate Democratic leader Harry Reid has signaled he has no interest in anything beyond an extension of current rates until at least 2014 - when a third of the Senate and the full House face re-election.

"Speaker Boehner says the House has acted and the ball is in the Senate's court," Reid said. "But Democrats can't support a plan that would be worse for students than doing nothing at all."

  • Most Popular StoriesMost Popular StoriesMore>>

  • Concern in Stewartville over a new policy by the school district

    Concern in Stewartville over a new policy by the school district

    According to the Unpaid Meal Charge Policy, if an account balance for a student is negative, those children are given an alternative meal. But the execution of this policy by Stewartville Public Schools is what's worrying some parents. 

    More >>

    According to the Unpaid Meal Charge Policy, if an account balance for a student is negative, those children are given an alternative meal. But the execution of this policy by Stewartville Public Schools is what's worrying some parents. 

    More >>
  • Rochester man tries to raise money for the Stewartville School Lunch Program

    Rochester man tries to raise money for the Stewartville School Lunch Program

    A story we brought you Thursday has garnered a lot of attention from viewers. We told you about a Stewartville Public Schools Policy giving students with negative account balances alternative lunches. On Friday we've learned about fundraising efforts to support students. 

    More >>

    A story we brought you Thursday has garnered a lot of attention from viewers. We told you about a Stewartville Public Schools Policy giving students with negative account balances alternative lunches. On Friday we've learned about fundraising efforts to support students. 

    More >>
  • Vehicle theft near Utica devastates farmer

    Vehicle theft near Utica devastates farmer

    A vehicle theft in rural Utica leaves a farmer wondering how he is going to be able to feed his cattle. Luke Kurth says he was having a normal Thursday morning until he returned from the vet to find his trailer, skid loader, and green 1999 F-350 truck all missing Kurth then called his neighbors who said they saw the equipment drive-by.

    More >>

    A vehicle theft in rural Utica leaves a farmer wondering how he is going to be able to feed his cattle. Luke Kurth says he was having a normal Thursday morning until he returned from the vet to find his trailer, skid loader, and green 1999 F-350 truck all missing Kurth then called his neighbors who said they saw the equipment drive-by.

    More >>
  • POLL: Do you agree with Stewartville Public School's 'Unpaid Meal Charge Policy'

    POLL: Do you agree with Stewartville Public School's 'Unpaid Meal Charge Policy'

    In the poll below, we want to hear what you have to think about Stewartville Public School's 'Unpaid Meal Charge Policy'. We will present the results of the poll in Friday's 10 p.m. newscast.

    More >>

    In the poll below, we want to hear what you have to think about Stewartville Public School's 'Unpaid Meal Charge Policy'. We will present the results of the poll in Friday's 10 p.m. newscast.

    More >>
  • One man crime spree takes over northeast Rochester neighborhood Thursday afternoon

    One man crime spree takes over northeast Rochester neighborhood Thursday afternoon

    An elderly couple down the street was just arriving home when the male suspect was in their backyard. "As I drove up I saw him standing there, so I went up this side to ask him what he was doing," said homeowner Gerald McGuire. McGuire approached the man, who told McGuire he would beat him up. The suspect ran and went into McGuire's truck, while the wife, who was still inside, began to honk.

    More >>

    An elderly couple down the street was just arriving home when the male suspect was in their backyard. "As I drove up I saw him standing there, so I went up this side to ask him what he was doing," said homeowner Gerald McGuire. McGuire approached the man, who told McGuire he would beat him up. The suspect ran and went into McGuire's truck, while the wife, who was still inside, began to honk.

    More >>
  • Unclaimed money could be yours

    Unclaimed money could be yours

    It's the 13th agreement in settlements with companies over unpaid claims, annuity contracts and retained asset accounts.

    More >>

    It's the 13th agreement in settlements with companies over unpaid claims, annuity contracts and retained asset accounts.

    More >>
  • Minnesota man charged with fatally running over girlfriend

    Minnesota man charged with fatally running over girlfriend

    Authorities have charged a 42-year-old Watertown man who allegedly killed his live-in girlfriend by running her over with his trickMore >>
    Authorities have charged a 42-year-old Watertown man who allegedly killed his live-in girlfriend by running her over with his trickMore >>
  • Package thief strikes two Oronoco homes

    Package thief strikes two Oronoco homes

    A package thief is at work in Oronoco, according to the Olmsted County Sheriff's Office. Deputies were called to the 300 Block of 5th Street Southeast just before 2:00 o'clock Wednesday afternoon, after a neighbor witnessed a driver in a white Pontiac back into a driveway, get out, and take a package sitting on the front doorstep of the home. The Pontiac Grand AM or Grand Prix had a sun roof and rear spoiler, according to the witness. Inside the stolen package were two pairs of chi...More >>
    A package thief is at work in Oronoco, according to the Olmsted County Sheriff's Office. Deputies were called to the 300 Block of 5th Street Southeast just before 2:00 o'clock Wednesday afternoon, after a neighbor witnessed a driver in a white Pontiac back into a driveway, get out, and take a package sitting on the front doorstep of the home. The Pontiac Grand AM or Grand Prix had a sun roof and rear spoiler, according to the witness. Inside the stolen package were two pairs of chi...More >>
Powered by Frankly