Washington — With federal student loan interest rates set to double, the Senate failed Tuesday to move forward on a bill that would extend low 3.4 percent rates for another year.
The student loan bill failed to win 60 votes needed to break a Republican filibuster and move it forward.
The party line vote was 52-45, with Sens. Joe Lieberman, I-Conn., and Richard Blumenthal, D-Conn., voting “yes” to officially start debate on the bill.
Senate Republicans balked at ending the filibuster because they object to the way Democrats want to offset its cost, an estimated $6 billion, by eliminating tax breaks for small businesses known as S-corporations.
The low Stafford loan interest rate stems from legislation approved by Congress and signed into law by President George W. Bush in 2007 that reduced rates over four years to 3.4 percent. But the law mandated that the rates revert to 6.8 percent on July 1.
Few Republicans or Democrats want that to happen, especially in an election year, but it’s unclear if Democrats will be able to cut a deal with Republicans on funding an interest rate freeze.
“This is why the public is so angry at us,” Lieberman said. “Everybody or almost everybody in both parties supports the idea of making sure we save people money on their student loans … so the argument is how you pay for that. So shame on us if we can’t compromise.”
Blumenthal also said he would support efforts to negotiate with the GOP.
“I am absolutely committed to finding a compromise that works,” he said.
The White House said 73,718 students in Connecticut have Stafford loans.
House Republicans passed a bill last month that would pay for extending the lower student loan rate by cutting a health care fund that promotes preventive care. President Obama vowed to veto that bill.
The impasse has sparked partisan sniping.
“With just 53 days remaining to prevent a catastrophe for middle-class families, the total lack of engagement by House Republican leaders and the abuse of the filibuster by their Senate counterparts show that congressional Republicans are not serious about finding a bipartisan solution to defuse this time bomb,” said Rep. Joe Courtney, D-2nd District.
Courtney introduced a bill in the House that would freeze Stafford interest rates, and he has been lobbying for its approval for months. But Courtney’s bill does not specify how the extension of low interest rates would be paid for.
Stafford loans have also become an issue in the race to the White House.
Obama has pushed Congress to quickly approve an extension of the lower rates and presumptive Republican presidential nominee Mitt Romney has done the same.
Lieberman said politicking on the issue is counterproductive.
“Each side can explain why they’re right,” Lieberman said.”But I think public’s general conclusion is that we’re ridiculous and we’re both wrong.”