Senate leaders said on Tuesday they had found a way to avoid a doubling of student loan interest rates.
The loan rates will freeze for a year, the senators said, though they’ve yet to agree on the specific method to cover the $5.5 billion cost on funding the education of over seven million college students, according to The Washington Post.
Student loan rates are scheduled to rise from 3.5 percent to 6.8 percent on July 1. The nationwide student-loan debt hangs at a massive $1 trillion. So the one-year freeze would hardly solve the growing debt problem for the nation’s young.
Lawmakers and the president both know they can manipulate the temporary freeze into a positive spin as the November election vote nears. Still, as the deadline on the loan rate has approached through June, both Congress and the White House have been involved in a blame game.
On June 21, Mitch McConnell, the Senate’s minority leader, criticized President Obama and the Democrats’ lack of action, saying, “Republican leaders in the Senate have been on record supporting multiple good faith solutions to this problem for weeks. It is the Democrat-led Senate that has failed to act, and the President who has failed to contribute to a solution.”
Obama responded on June 23, “We are eight days away from nearly seven and a half million students seeing their loan rates double because Congress hasn’t acted to stop it. This makes no sense. This is a time when we should be doing everything in our power – Democrats and Republicans – to keep this recovery moving forward.”
Lawmakers are considering raising federal pension insurance premiums to raise $5.5 billion and cover the loans, but that’s not settled yet.
Sen. Harry Reid, the majority leader, summarized the tussle over the issue, and pretty much the state of Congress itself: “We’re very close to having everything done,” Reid said. “But until we get everything done, nothing’s done.”