Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
July 8, 2015

Reid Admits Student Loan Deal Is Unlikely

Senate Majority Leader Harry Reid acknowledged Wednesday that the chances of a student loan deal passing the chamber this week are low.

“There is no deal on student loans that can pass the Senate because Republicans continue to insist that we reduce the deficit on the backs of students and middle-class families, instead of closing tax loopholes for the wealthiest Americans and big corporations,” the Nevada Democrat’s spokesman Adam Jentleson said. “Democrats continue to work in good faith to reach a compromise but Republicans refuse to give on this critical point.”

If the tax issue is indeed critical, then it seems unlikely any agreement can be reached.

But some negotiators were still working to reach a compromise on Wednesday.

Sen. Joe Manchin III, D-W.Va., has been trying for a student loan compromise with Maine Sen. Angus King, an independent who caucuses with Democrats, and several Republicans.

He told reporters Wednesday that his group essentially has an agreement, saying that he had “signed off” on it, although work continues.

It is unclear how much buy-in the proposal Manchin is working on would have. Don Stewart, a spokesman for Minority Leader Mitch McConnell, R-Ky., was quick to respond to Reid’s office in a statement.

“As a result of their obstruction, interest rates on some new student loans will increase next week. The Republican House has already passed legislation and Senate Republicans, along with the President, are ready to pass bipartisan student loan reform that will ensure that student loan rates don’t double on July 1st,” Stewart said.

On Tuesday, several senators hinted at what Reid and McConnell are now acknowledging, that student loan rates are likely to go up next week. However, some senators believe a retroactive bill could be adopted when the House and Senate return from their July Fourth recess.

However, as CQ Roll Call has reported, the principle problem in getting a deal has been Senate Democrats’ displeasure with President Barack Obama’s proposal, which is similar to the Senate GOP’s plan.

UPDATE, from WGDB’s lesser half, Shiner, at 5:10 p.m.: As anticipated, a bipartisan group of senators announced a student loan compromise. Manchin and King, along with Republicans Richard Burr of North Carolina, Tom Coburn of Oklahoma and Lamar Alexander of Tennessee unveiled a plan that looks close to the White House/Senate GOP framework.

Here’s the new Manchin/King/Burr/Coburn/Alexander formula, per a joint release:

“The Student Loan Certainty Act requires that, for each academic year, all newly-issued student loans be set to the U.S. Treasury 10-year borrowing rate plus 1.85% for subsidized and unsubsidized undergraduate Stafford loans; plus 3.4% for graduate Stafford loans; and plus 4.4% for PLUS loans. The interest rate would be fixed over the life of the loan and the cap on interest rates for consolidated loans would remain at 8.25%. The Congressional Budget Office has determined this legislation would reduce the deficit by $1 billion over ten years.”

Of course, that last deficit reduction piece is the rub. Typically, lawmakers are giddy when the CBO scores a bill as reducing the deficit. But Democrats had been hoping for a deficit neutral plan. On principle, they oppose the idea of using revenue from students to pay down the debt, although in practice, this is likely to happen under most plans that are politically viable at this point. It’s unclear how much tinkering with the formula would need to be done, given Reid’s comment, but the Senate plans to wrap its immigration bill this week and then will recess for July 4th, so the time is short and paths narrow to get a deal.

Comments (7)

Leave a Comment

Your email address will not be published.

author email

  1. Anonymous

    June 27, 2015
    3:22 a.m.

    I’m extremely impressed with your writing abilities and also with the layout in your weblog. Is that this a paid theme or did you customize it yourself? Anyway stay up the nice quality writing, it’s rare to see a nice weblog like this one these days..

  2. Anonymous

    July 2, 2015
    3:23 p.m.

    Howdy! I could have sworn I’ve been to this site before but after checking through some of the post I realized it’s new to me. Nonetheless, I’m definitely glad I found it and I’ll be bookmarking and checking back often!

  3. Anonymous

    July 4, 2015
    3:57 a.m.

    You actually make it appear really easy with your presentation but I in finding this matter to be actually one thing that I think I’d never understand. It sort of feels too complicated and extremely wide for me. I am looking forward in your subsequent put up, I will try to get the cling of it!

  4. Anonymous

    July 4, 2015
    10:08 a.m.

    Hello! I know this is kinda off topic however , I’d figured I’d ask. Would you be interested in trading links or maybe guest authoring a blog post or vice-versa? My site goes over a lot of the same topics as yours and I believe we could greatly benefit from each other. If you’re interested feel free to send me an e-mail. I look forward to hearing from you! Excellent blog by the way!

  5. Anonymous

    July 6, 2015
    6:51 p.m.

    I will right away grab your rss feed as I can’t find your e-mail subscription link or newsletter service. Do you have any? Please let me know in order that I could subscribe. Thanks.

  6. Anonymous

    July 7, 2015
    5:05 p.m.

    Great ?V I should certainly pronounce, impressed with your website. I had no trouble navigating through all the tabs and related info ended up being truly easy to do to access. I recently found what I hoped for before you know it in the least. Quite unusual. Is likely to appreciate it for those who add forums or anything, site theme . a tones way for your client to communicate. Excellent task..

  7. Anonymous

    July 7, 2015
    7:46 p.m.

    You really make it appear so easy along with your presentation but I find this matter to be actually one thing that I think I’d by no means understand. It kind of feels too complex and very large for me. I am having a look ahead in your subsequent publish, I’ll attempt to get the hang of it!

Sign In

Forgot password?



Receive daily coverage of the people, politics and personality of Capitol Hill.

Subscription | Free Trial

Logging you in. One moment, please...