Senate approves student loan bill, without support of Blumenthal or Murphy

Washington — The Senate voted 81-18 to approve a bipartisan compromise that would reverse a sharp hike in the interest rates of Stafford college loans, but allow them to rise in the future.

Connecticut Sens. Richard Blumenthal and Chris Murphy, both Democrats, strongly opposed the deal and were among the 17 Democrats and one Republican who voted against it. Several Democrats who voted “no” were also from New England, including Sens. Jack Reed and Sheldon Whitehouse, both from Rhode Island, and Elizabeth Warren of Massachusetts.

Murphy said he opposed the deal because it would result in higher interest rates for students while enriching the  U.S. Treasury.

“It is harder than ever for families to afford to send their children to college, and that’s why it makes no sense for the federal government to continue profiting off of the federal student loan program,” Murphy said.

Blumenthal said the deal would offer “teaser rates” to students, luring them into taking out loans that would become more expensive over time.

Rates on the Stafford loan for undergraduates doubled to 6.8 percent July 1 because Congress could not agree on a way to stop the hike.

The compromise approved by the Senate Wednesday cut that rate to 3.8 percent, but tied future interest to the U.S. Treasury bond rate. There is a cap, however, of 8.25 percent.

Interest rates on Stafford loans taken out by graduate students and parents would also decrease.

The House is expected to approve the student loan bill before Congress breaks for August recess.