Efforts to keep interest rates on new student loans from doubling appeared to be falling apart Wednesday as the Democratic leader of the Senate declared a bipartisan proposal unacceptable.
With just days to spare before a July 1 deadline, a group of senators from both parties attempted to link interest rates on new federally subsidized Stafford loans to the financial markets in a deal that would avert a costly rate hike for now but could spell higher rates in coming years. The loans account for a quarter of all federal student lending.
The proposal seemed to stall even before it had a chance to be considered.
The chamber’s top Democrat, Sen. Harry Reid of Nevada, said it could never pass. The Democratic chairman of the education panel said he couldn’t back a plan that doesn’t include stronger protections for students and parents.