Senate to Let Student Loan Rates Double

No deal looks likely before looming July 1 deadline

By Newser Editors and Wire Services

Posted Jun 27, 2013 6:36 PM CDT

(Newser) – A compromise to keep student loan interest rates low proved unwinnable before Monday's deadline and interest rates on new loans are going to double — at least for a while — senators said today. Tom Harkin, the chairman of the Senate education panel, said none of the proposals being circulated among lawmakers could win passage, and he urged lawmakers to extend the current rates for another year when they return from recess on July 10. Harkin said his colleagues could retroactively lower the rates when they return from the holiday.

"Let's put this off for a year," Harkin told reporters. But many aren't willing to do that, either. "Last year we kicked the can down the road and passed a one-year extension," Richard Burr said. "Why would we make the same mistake again and just kick the can down the road another year?" Burr is among a group, led by Joe Manchin, pushing an alternative that would link student loan rates to financial markets, an idea some Democrats oppose but which President Obama has supported.

Tom Harkin and Jack Reed discuss a graph and legislation to try and prevent the increase in the interest rates on some student loans, June 27, 2013.
Tom Harkin and Jack Reed discuss a graph and legislation to try and prevent the increase in the interest rates on some student loans, June 27, 2013.   (Susan Walsh)
Tom Harkin discusses a graph and legislation to try and prevent the increase in the interest rates on some student loans, June 27, 2013.
Tom Harkin discusses a graph and legislation to try and prevent the increase in the interest rates on some student loans, June 27, 2013.   (Susan Walsh)
Democratic senators talk about legislation to try and prevent the increase in the interest rates on some student loans, June 27, 2013, during a news conference on Capitol Hill.
Democratic senators talk about legislation to try and prevent the increase in the interest rates on some student loans, June 27, 2013, during a news conference on Capitol Hill.   (Susan Walsh)
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