A last minute proposal to keep student loan interest rates from doubling has bipartisan support in the U.S. Senate and could pass Congress by today, Rep. Ron Kind said.
Interest rates could jump from 3.4 percent to 6.8 percent for federally subsidized student loans unless lawmakers pass a stop-gap measure before Sunday.
Previously, politicians have disagreed on how to cover the $6 billion cost of extending the current rate.
The new plan has backers on both sides of the aisle.
"To get things done, both sides have to compromise," said Kind, a Democrat from La Crosse. "Both sides have to be willing to give and take."
The proposal would tweak federal pension rules to help recover the cost of the rate freeze, Kind said.
Most of the $6 billion would be recouped by smoothing out how companies contribute to pension funds, limiting tax deductions. The rest would be made up by hiking fees for insuring pension plans.
Republicans and Democrats in the U.S. Senate both expressed support for the measure. However, House leaders have been less clear about their support, though it's a good sign they're even considering the plan, Kind said.
"(House Speaker John Boehner) has not said no," Kind said. "He has not closed the door."
Even if a solution is in place by July 1, the money lasts only a year, and the loan interest rates will again face a possible hike.
Lawmakers should work together on permanent way to keep rates low instead of applying temporary bandages, said Dan Dodge, a 2012 graduate of the University of Wisconsin-La Crosse.
Dodge, 22, has more than $50,000 in student loan debt from private lenders and the government.
"It seems like they have no trouble finding money for all of these other programs," Dodge said. "They should be able to sit down and have that conversation. It would be nice if both sides would come out and say how they honestly view it."
Dodge found a job, but he won't get paid until fall. Meanwhile, his first loan payments are due in a couple of weeks, and he'll probably dig into money he saved while working college and high school jobs.
A temporary solution smacks of political convenience, he said.
"Extending it a year at a time, it's a short-term solution to a long-term problem," he said.
Roughly 71 percent of UW-L graduates had student loan debt in 2009-10, owing an average of about $16,500, according to the UW System. Between 1993 and 2010 average debt skyrocketed from about $8,000 to $25,397. Half of UW resident undergraduates paid for college with loans in 1992. By 2010, 71 percent paid with loans, according to the UW System.
Kind spoke with UW-L students, including Dodge, in May about the looming rate increase, and the political back-and-forth over a solution. Both Republicans and Democrats pitched plans, only to have them blocked by the other side.
The current proposal would be an effective compromise on a problem that needs solving, Kind said.
"I know how difficult it is for the students to afford higher education to begin with," Kind said. "Let alone a doubling of the interest."