On July 1, need-based student loan rates doubled from 3.4 percent to 6.8 percent. The Senate will vote Wednesday on whether to proceed to a bill that would retroactively extend that rate for one year. Closing a tax break on tax-deferred retirement accounts pays for the bill, S. 1238. A similar bill failed to overcome a Republican filibuster last month.
Reid said that proposals put forward by Republicans “balance the budget on the backs of students.”
The House passed a bill last month that sets student interest rates to the 10-year Treasury note plus 2.5 percent. It also caps the rate of consolidated loans at more than 8 percent. A small bipartisan group of senators have a similar plan, but Reid said their bills are worse than doing nothing at all.
“If you can explain to me why these proposals that the Republican’s have are better than just having the rates double, please explain that to me,” Reid said. “I think we should support a plan that would be better for students not worse for students.”