By Vicki Needham - 06/06/12 10:45 PM EDT
The measure also directs that any remaining savings left over to be sent to the Treasury for the purpose of debt reduction.
“Stop-gap measures have been the norm on a multitude of issues in Washington lately, but one thing that is consistent among them is that short-term fixes are rarely the answer to the problem,” Burr said.
“Not only will this bill bring loan payments down for students, but by indexing student loan rates to a market rate, we provide a long-term solution to this issue.”
The Congressional Budget Office included this proposal in its recent budget options, providing potential savings of $52 billion over 10 years.
President Obama heads to Las Vegas on Thursday to press lawmakers to pass an extension of current interest rates on student loans before the end of the month.
The rates on subsidized Stafford loans are set to double, from 3.4 percent to 6.8 percent, on July 1, and the White House has deemed the issue a top priority.
Meanwhile, House Republican leaders, Speaker John Boehner (R-Ohio) and House Majority Leader Eric Cantor (R-Va.), instead asked Obama on Wednesday to cancel the event and, instead, focus on working with Republicans on extending the rates.
House and Senate Republicans have offered up a set of proposals to extend the rates for a year, at a $6 billion cost.