House Republicans are in direct discussions with the Obama administration over how to avoid a doubling of student loan interest rates in July, bypassing a Senate that has been unable to pass its own proposal.
House Majority Leader Eric Cantor (R-Va.) said on the House floor that the GOP is still looking for a way to avoid a doubling of rates from 3.4 percent to 6.8 percent, which will happen on July 1 without congressional action. But he said Republicans are dealing with administration officials, after the Senate failed to advance two competing proposals last week.
"I've talked to several members of the administration, [Education & the Workforce Committee] Chairman John Kline [R-Minn.] has been in contact, I know, with the Secretary [of Education] as well as others in trying to resolve this issue," Cantor said. "Discussions are ongoing, and it is my hope … that we can resolve this issue so that prospective students could be assured that their rates would not double.
Cantor described the talks in a discussion with House Minority Leader Steny Hoyer (D-Md.), who pointed out that the Senate does not have the votes for a Democratic proposal or the House-passed plan to avoid the rate hike.
"The reason the Senate hasn't acted … is because … frankly they can't get cloture," Hoyer said. "They can't get 60 votes, and frankly, Mr. Reid doesn't have 60 votes."
The House passed a bill that would set the interest rate at the 10-year Treasury rate plus 2.5 percent, and would cap rates at 8.5 percent. While this plan is structured similarly to one President Obama proposed, it is different enough that Obama and congressional Democrats oppose it.
Obama's plan would have added 0.9 percent to the 10-year Treasury rate.
Democrats in the House and Senate support a two-year extension of the 3.4 percent rate, paid for by closing various corporate tax loopholes over 10 years. But House Republicans will not call up that plan, and the Senate failed to win enough votes to end debate on that plan.