November 28, 2014

Proposal to keep college student loan rates from doubling fails (AUDIO)

It seems both sides agree on the goal, but Republicans and Democrats in the United States Senate differ greatly on how to reach it.

A proposal to keep college student loan interest rates from doubling has failed in the Senate, as Republicans prevent it from getting the 60 votes needed.

Sen. Mike Johanns voted against the proposal. Johanns, a Republican, complained the solution proposed by Democrats will hurt the economy by increasing the Social Security and Medicare payroll tax on high-earning stock holders and privately owned corporations. Johanns, in a Senate floor speech, told colleagues no one truly believed the proposal would win approval.

“It’s time to look for practical solutions that can actually pass the Senate and help the American people,” Johanns stated. “Americans are getting sick and tired of election-year voting where we face legislation that we all know is designed to fail with the singular focus of generating good campaign talking points.”

Johanns said increasing the payroll tax would harm job creation, adding that job creation is more important than lowering the student loan interest rate.

“Young Americans would have greater prospects for the future in an economy that generated jobs and is growing income,” according to Johanns.

The interest rate on Stafford student loans will double, jumping from 3.4% to 6.8% if Congress doesn’t act by July 1st. Current Senate rules require 60 votes to advance debate.

Republicans have proposed paying for the proposal by doing away with a preventive health fund created in the 2010 health care overhaul.

“There’s been a lot of finger-pointing on this issue, but in reality everybody agrees interest rates on the Stafford loans should not double when the economy is struggling,” Johanns said. “The only disagreement is over how to pay for the relief.”

The issue has become an issue on the campaign trail. President Obama has harshly criticized Republicans for blocking efforts to keep the student loan rate from doubling.

AUDIO: Sen. Mike Johanns addresses the Senate during the student loan debate. [7 min.]