Blumenthal says government sees 'big banks' as worth more than students

Blumenthal pointed out that student loan rates are higher than the borrowing rate for large banks. Lawmaker missed the July 1 deadline to prevent need-based student loan rates from doubling from 3.4 percent to 6.8 percent.

On Wednesday, the Senate will vote on a motion to proceed to the Keep Student Loans Affordable Act. Sen. Jack ReedJack ReedTop Lobbyists 2016: Hired Guns Armani, Batali among guests at White House state dinner Overnight Finance: Jobless claims near record low | Cops bust IRS phone scam in India | Republican demands Iran sanctions docs MORE (D-R.I.) introduced S. 1238, which would extend the 3.4 percent rate for need-based loans for one year and would be paid for by ending a tax break on tax-deferred retirement accounts.

Blumenthal said doing nothing about student loan rates would have serious economic implications for the country because most U.S. jobs require some higher education.

“It seems to me like one of the most effective measures we could take to promote job growth is to increase access to higher education," Blumenthal said. "At the very least, we should not be actively hindering this access by allowing rates to increase.”

Democrats argue that given one more year, lawmakers would have time to address the drivers of tuition increases and the $1 trillion of existing student loan debt in reauthorization of the Higher Education Act.

Sens. Joe ManchinJoe Manchin5 takeaways from the Pa. Senate debate Trump questions hound endangered Republican Dems to McConnell: Pass 'clean' extension of Iran sanctions MORE (D-W.Va.), Richard BurrRichard BurrGOP vulnerables dial back Hillary attacks Warren’s power on the rise Dem group knocks Burr over Medicare in NC Senate ad MORE (R-N.C.), Tom CoburnTom CoburnRyan calls out GOP in anti-poverty fight The Trail 2016: Words matter Ex-Sen. Coburn: I won’t challenge Trump, I’ll vote for him MORE (R-Okla.), Lamar AlexanderLamar AlexanderObama meets a crossroads for his healthcare law Music streamer Spotify joins Gillibrand’s push for paid family leave GOP senators avoid Trump questions on rigged election MORE (R-Tenn.), Angus KingAngus KingBetter child care for stronger families Wells CEO Stumpf resigns from Fed advisory panel Pentagon chief: 9/11 bill could be used against US troops MORE (I-Maine) and Tom CarperTom CarperYahoo hack spurs push for legislation Election-year politics: Senate Dems shun GOP vulnerables Overnight Healthcare: McConnell unveils new Zika package | Manchin defends daughter on EpiPens | Bill includes M for opioid crisis MORE (D-Dele.) introduced a bipartisan bill similar to what House Republicans passed last month. The Bipartisan Student Loan Certainty Act requires all newly issued student loans be set to the U.S. Treasury 10-year borrowing rate plus 1.85 percent for undergraduate loans. The cap on interest rates for consolidated loans would be 8.25 percent.

Manchin said he wasn't confident that the Senate could agree on a larger higher education bill by next year. He also said his student loan bill was better because it's a permanent fix for all students not just a one-year extension for the poorest 40 percent.

"Under our proposal everything is 3.66 percent next year," Manchin said Tuesday. "It could go up, you could have inflation."

But most Democrats have said that plan is worse than doing nothing because there is no loan rate interest cap, meaning rates could grow higher than 6.8 percent.

“Proposals that have low ‘teaser rates’ but will only result in high rates down the road will harm our nation's economy and only exacerbate the problems that we face.”

Blumenthal cosponsored a bill with Sen. Elizabeth WarrenElizabeth WarrenThe Hill's 12:30 Report If Hillary wins, she should serve one term and move on Warren’s power on the rise MORE (D-Mass.) that would have allowed students to take advantage of the low interest rates that banks get, but measure hasn't gotten a vote.