Student Loan Standoff: Stafford Rate Still Set to Double July 1

Give U.S. lawmakers an “F” for failing to approve a one-year extension of the lowered, federally-subsidized Stafford loan rate of 3.4 percent, despite both parties supporting such a move.
With a little more than five months to the presidential election, both sides are more entrenched than ever in making a political point, leaving some 7.4 million students concerned that on July 1 the Stafford rate will double to 6.8 percent if lawmakers fail to reach an accord.
The Senate rejected Democratic and Republican plans on Thursday that would have averted the doubling of the rate, delaying another vote drama until June.
In mostly party-line votes, senators voted 62-34 against the GOP package and 51-43 for the Democratic version, each falling short of the 60 votes needed for approval.
Neither party wants to be blamed for letting the interest rates double – and risk sure-fire alienation of the college-age vote. So it is likely that eventually a compromise will be hatched.
The sticking point is how to pay for the roughly $6 billion cost of the interest rate extension.
Democrats propose raising Social Security and Medicare payroll taxes on high-earning owners of some privately-held companies, while Republicans would abolish an Obama wellness program that focuses on prevention as part of his health care reform.

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