NEW YORK (MainStreet)—The Senate is set to vote today on two competing bills that will decide the interest rates some 7 million students will pay on their Stafford loans.
A Republican bill on student loans is also being readied for a vote, but Washington insiders say that at the end of the day, a resolution is unlikely. Action on student loans is expected to come down to the wire, as it competes with immigration reform and other issues. Rates on most Stafford loans are set to jump from 3.4% to 6.8% if a July 1 deadline for reducing them is missed.
Roll Call reports today that the White House is wary of the current House bill, because it doesn't lock rates for students at the level loans are issued—and is concerned that excess revenue will be used to pay down the national debt.
"We have no reason to work out a compromise," said Senate Majority Leader Harry Reid (D-NV). "I'm not looking for compromise. I'm looking to pass our bill."
The Democrats' bill would lock in low interest rates until the Higher Education Act can be reauthorized two years from now. The plan targets tax loopholes on retirement accounts and foreign corporations operating in the United States.
--Written by John Sandman for MainStreet