Senate nixes both parties’ student loan plans

Senate nixes both parties’ student loan plans

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 The top Republican on the Senate education panel seemed to share that frustration. “If we can’t agree on this, we can’t agree on anything,” said Sen. Lamar Alexander. “This is a manufactured crisis.”The failure comes just three weeks before interest rates increase on federally subsidized Stafford loans return to 2008 levels. For students who max out their student loans every year, the rate shift would mean this year’s loans will cost more than $1,000 than last.“Congress must act immediately to stop the imminent doubling of interest rates on student loans,” the White House said in a statement as President Barack Obama was on his way to North Carolina to visit a school.

Democrats in the Senate unsuccessful sought a two-year extension of the current rates while lawmakers write a comprehensive overhaul of the student loan process.

Republicans, meanwhile, wanted to link interest rates to financial markets. Under Senate Republicans’ plan, interest rates would be based on the 10-year Treasury note and, once the rates were set each year, remain there until the loans were paid off.

The GOP parameters were not that different from President Barack Obama’s budget proposal, which also included interest rates linked to markets, or a version House Republicans have passed through their chamber.

President Barack Obama threatened to veto House Republicans’ legislation.