WASHINGTON -- Under pressure to find a quick way to lower rates on federally subsidized student loans, Senate Democrats failed Wednesday to extend a low rate for another year.
Their plan was blocked by bipartisan supporters of a compromise effort to tie the rate to what the government pays to borrow money. It could get a vote Thursday and would lower rates on all types of student loans, at least for now.
Most Senate Democrats backed a proposal to extend the previous 3.4 percent rate on subsidized loans, about 40 percent of student loans, for another year. They needed 60 votes to limit debate and proceed to a vote on the bill, but that effort failed, 51-49.
Under current law, Congress sets student loan rates. The 3.4 percent for federally subsidized loans expired July 1 and rose to 6.8 percent because lawmakers couldn't agree on a new plan. -- MCT