Student loan bill fails in the senate

The Senate failed to advance a bill that would extend low interest rates for student loans. 

According to The New York Times, "Along party lines, the Senate voted 52 to 45, failing to clear the 60-vote hurdle needed to beat back a filibuster and begin debating the measure."

The bill, titled "Stop the Student Loan Interest Rate Hike Act of 2012," was Democrat-sponsored. 

Interest rates are set to double in two months if the Senate does not come to an agreement. 

Democrats and Republicans agree that the loan rates should remain low, according to The Washington Post, however they cannot agree on how to pay for the plan's $6 billion dollar price tag. 

Before the vote on Tuesday, Senate Minority Leader Mitch McConnell told the Washington Post, the Democratic attempts to block the GOP proposal was part of Obama’s “cynical election-year strategy." He added, “Rather than working with Republicans to help young people in this country weather the effects of the ‘Obama economy,’ Democrats have sought to distract them from it."

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The New York Times reported, "Senate Democrats want to pay for a one-year extension by changing tax law that currently allows some wealthy taxpayers to avoid paying Social Security and Medicare taxes by classifying their pay as dividends, not cash income."

“They want to raise taxes on people who are creating jobs when we are still recovering from the greatest recession since the Great Depression,” Senator Lamar Alexander, a Republican told The NYT. Alexander proposed they pay the deficit by eliminating a preventive health care fund in President Obama’s health care law.

Senate Minority Leader Mitch McConnell told Politico, “While we don’t think young people should have to suffer any more than they already are as a result of this president’s failure to turn the economy around, we just disagree that we should pay for a fix by diverting $6 billion from Medicare and raising taxes on the very businesses we’re counting on to hire these young people.”

Both President Obama and Mitt Romney have included the student loan bill in their campaigns, both agreeing interest rates need to remain stable.

This may be more of political grandstanding than real issue, as National Journal points out, "Without congressional action, the interest rate for subsidized student loans will double on July 1 to 6.8 percent. It would mean $1,000, on average, in additional costs for about 7 million borrowers. It’s not chump change, but over a 10-year repayment period, it’s probably won’t send anyone to the poorhouse either." 

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