U.S. Senators Roger Wicker (R-Miss.) and Thad Cochran (R-Miss.) today encouraged Senate Majority Leader Harry Reid (D-Nev.) to allow a vote on a proposal they support to extend the current interest rate for student loans.
Cochran and Wicker on Tuesday opposed a Democrat-backed measure to pay for the legislation with tax increases on small businesses. The Mississippi Senators called for a vote on an alternative they cosponsored, the Interest Rate Reduction Act, S.2366. This plan would extend the temporary Stafford-subsidized student loan rate of 3.4 percent without raising taxes.
"Many recent college graduates are facing a higher interest rate but have no way to repay their student loans because they have not been able to find a job," said Wicker. "Both sides agree that we should extend the current rate, but the President and Senate Democrats have decided to play political games first. Republicans introduced sensible legislation that would help these recent graduates without hiking taxes on those who are trying to create jobs. Senator Reid should allow us to vote on it."
"The students who rely on these loans are being used for political gamesmanship, which is regrettable. The slow economic recovery and rising college costs represent burdens for college students and their families," Cochran said. "It is important that we find a reasonable solution to this situation. There is broad support for extending current interest rates on student loans. I am hopeful we can soon reach an agreement to do just that."
A Senate vote has not been allowed on S.2366, which would offset the cost of the student loan interest rate extension by tapping $6 billion from a fund created by the Affordable Care Act, the health care reform law enacted in 2010. This fund has been used previously to offset the costs of other government spending. S.2366 is identical to a House-passed measure.
The 2011-2012 Stafford-subsidized student loan rate, 3.4 percent, is set to double to 6.8 percent because the College Cost Reduction and Access Act¸ which temporarily lowered rates, expires on July 1. Approximately 7.4 million undergraduate student borrowers would be impacted.
The rate increase comes as many recent college graduates encounter a difficult job market. According to a recent analysis by the Associated Press, over half of Americans under the age of 25 with a bachelor's degree are jobless or underemployed.