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Senate Democrats’ Failing Grade For Grads

- June 27, 2013

HARRY REID & SENATE DEMOCRATS ARE BLOCKING BIPARTISAN EFFORTS TO STOP STUDENT LOAN RATES FROM DOUBLING

“With Just Days To Spare,” Senate Democrats’ Obstruction Has Threatened To Allow Subsidized Student Loans To Double From The Current 3.4% To 6.8%. “With just days to spare before a July 1 deadline sends subsidized Stafford loan rates up from 3.4 percent to 6.8 percent, a group of senators from both parties announced a plan that would link interest rates on new federally backed loans to the financial markets.” (“Bipartisan Proposal To Keep Student Loan Rates Low Faces Uncertain Prospects As Reid Objects,” The Associated Press, 6/26/13)

Even Before A Bipartisan Plan Could Be Considered By The Senate, Sen. Harry Reid Claimed It Could Never Pass. “The proposal seemed to stall even before it had a chance to be considered. The chamber’s top Democrat, Sen. Harry Reid of Nevada, said it could never pass. The Democratic chairman of the education panel said he couldn’t back a plan that doesn’t include stronger protections for students and parents.” (“Bipartisan Proposal To Keep Student Loan Rates Low Faces Uncertain Prospects As Reid Objects,” The Associated Press, 6/26/13)

  • The Associated Press Headline: “Bipartisan Proposal To Keep Student Loan Rates Low Faces Uncertain Prospects As Reid Objects” (“Bipartisan Proposal To Keep Student Loan Rates Low Faces Uncertain Prospects As Reid Objects,” The Associated Press, 6/26/13)

Reid And Other Top Senate Democrats Have “Pushed Back Against” Efforts To Strike A Deal In The Senate. “However, Senate Majority Leader Harry Reid, D-Nev., and a faction of top Democrats including Senate Health Education Labor and Pensions Committee Chairman Tom Harkin, D-Iowa, pushed back against reports of a deal. ‘There is no deal on student loans that can pass the Senate,’ Reid said.” (Susan Davis, “Student Loan Deal Close But Likely To Miss Deadline,” USA Today, 6/26/13)

Reid Is Shooting Down The Senate Bill Despite The Fact That It “Draws From Formulas For Setting Future Interest Rates That Have Been Proposed By President Obama And House Republicans In A Bill They Approved Last Month.” “A bipartisan group of lawmakers Thursday will introduce a compromise student loan proposal aimed at preventing a massive increase in student loan interest rates on July 1. The proposal, which was hammered out over the past week by Sens. Joe Manchin, D-W.Va.,  Angus King, I-Maine, Tom Coburn, R-Okla.,  Richard Burr, R-N.C., and Lamar Alexander, R-Tenn.,  draws from formulas for setting future interest rates that have been proposed by President Obama and House Republicans in a bill they approved last month.” (Abby D. Phillip and Jeff Zeleny, “New Bipartisan Student Loan Deal Faces Long Odds In Senate,” ABC News’ The Note, 6/26/13)

HOUSE REPUBLICANS HAVE ALREADY PASSED STUDENT LOAN RELIEF BASED ON A PLAN FROM OBAMA

In May, House Republicans Took Action To Stop The Interest Rate Hike By Passing A Plan That Pegged Loan Rates To Market Rates. “The House last month passed a bill that would peg student loan rates to the interest rate of 10-year Treasury notes plus 2.5 percent. The rate for Stafford loans would fluctuate from year to year but could not exceed 8.5 percent.” (Alexander Bolton, “House GOP Ratchets Up Battle With Senate Over Student Loan Rates,” The Hill, 6/22/13)

  • The House-Passed Plan Was Modeled On A Plan Introduced By Obama In His 2014 Budget. “They pointed out that the Smarter Solutions for Students Act was based on the plan that the president himself introduced in his fiscal year 2014 budget request. Obama’s plan also based the student loan interest rate on the 10-year Treasury rate but it adds 0.93 percent instead of 2.5 percent.” (Kate Irby, “Obama Urges Congress To Stop Hike In Student-Loan Interest,” McClatchy News Service, 5/31/13)

Obama’s Plan Includes A Market-Based Approach Similar To The Type Of Plan Long Pursued By Republicans – Leaving “Democrats Grousing And Trying To Thwart Those Efforts.” “Republicans have long sought to link student loans to the financial markets instead of letting Congress set the rates for federal lending. President Barack Obama included a variation of that market-based approach in the budget he sent to Congress earlier this year, leaving his fellow Democrats grousing and trying to thwart those efforts.” (“Bipartisan Proposal To Keep Student Loan Rates Low Faces Uncertain Prospects As Reid Objects,” The Associated Press, 6/26/13)

Only “Minor Differences” Separate The Student Loan Plans Supported By House Republicans And The Obama White House. “The challenge now is for the House and White House to resolve their relatively minor differences and bring Senate Democrats on board by July 1. Better access to higher education is a vital component not just of economic prosperity but of a healthy democracy.” (Editorial, “Obama’s Republican Student-Loan Plan,” Bloomberg, 6/13/13)

  • The Wall Street Journal: “A Spread Of 93 Or 293 Basis Points Means The President Cares About Young People, But 250 Basis Points Signifies Unspeakable Cruelty?” (Editorial, “Obama's Student-Loan Props,” The Wall Street Journal, 5/30/13)

 

 


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