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Student Loan Debate Mired in Senate DivideMay 07, 2012
Associated Press – The Senate is now taking on a debate started in the House of Representatives: how to keep the interest rate on subsidized Stafford Loans from doubling before the July 1 deadline. Congress is locked in a partisan stalemate between Republicans and Democrats over how to cover the $6 billion in revenue the federal government will lose by not returning the interest rate to its 2007 level. Republicans propose, in a measure already passed by the House, to pay for it by taking money out of a preventive medical measure (including vaccines) backed by the White House, while Democrats hope to increase payroll taxes on wealthier Americans. The GOP bill is expected to fail in the Senate, but the Democratic bill is like to face fierce resistance among Senate Republicans and the House. A compromise measure has not yet been put forth, though both sides expect a compromise by the deadline. Neither side wants to be responsible for increasing student loans in an election year and at a time when the average student has $26,000 in loan debt. Republicans fear this could increase support among young voter for President Obama, who relied heavily on them in his 2008 victory. The White House has asked for a one-year extension on the reduced interest rate, meaning the rate could double in 2013, a non-election year. For more, read Federal Student Loan Legislation Turns to Partisan Fight.
RSC reminds students that the best way to pay for college is to avoid student loans. The lower your loan debt, the more likely it is you’ll graduate from college.