Senate rejects rival bills extending low-interest federal student loans

The Senate on Thursday rejected two competing bills that would prevent interest rates on federal student loans from doubling starting in July.

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The failure of the two measures — one backed by Democrats and one backed by Republicans — guarantees both parties will continue to battle over how to keep the loan rate low over the coming weeks, right through spring graduations that have helped call attention to the issue.

The Democratic bill failed in a 51-43 vote — attaining a majority, but short of the 60 required for passage. Sen. Jim Webb (D-Va.) was the only Democrat to vote against the bill. Sen. Olympia Snowe (R-Maine) voted present.

Just before that vote, the GOP bill, which was offered as a substitute amendment and also needed 60 votes, failed 34-62. Snowe voted present again, and nine Republicans voted against the amendment.

Both sides agree the low interest rates should be extended, but the two parties disagree over how to cover the nearly $6 billion cost.

Democrats would pay for it by closing a business tax break, while Republicans would close a fund in the healthcare law.

The result was expected, as Senate Majority Leader Harry Reid (D-Nev.) predicted before the votes that both bills would fail.

“I'm certainly aware of how things work around here. Neither one of these things are going to pass, sorry to say,” Reid said. “These two proposals were not created equal, but I hope a few reasonable Republicans will join with us to not put Americans' health at risk.”

Republicans said Reid set up the vote to fail to help give Democrats a political talking point over the next few weeks.

Shortly after Reid spoke, Senate Minority Leader Mitch McConnell (R-Ky.) said that Democrats were pushing legislation that was “designed to fail,” in particular because the Senate had already rejected the Democratic proposal earlier this year. 

"So why are Democrats forcing us to vote on their failed proposal yet again? Because, as I’ve said, they’re more interested in drawing our opposition — of creating a bad guy — than in actually solving the problem," McConnell said.

The student loan issue became a political hot potato last month after President Obama ripped into Republicans during a tour of college campuses for holding back on extending the low interest rates.

Young voters were a key demographic in the president’s 2008 election and he is making a concerted effort to keep them on his side.

Obama’s efforts prompted House Republicans to approve an extension, which was coupled with language shutting down a fund designed to pay for preventive healthcare, which was created by the 2010 healthcare law. The White House has threatened to veto the GOP bill over this language.

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