Senate blocks bill to lower interest rates on student loans

The bill introduced by Sen. Elizabeth Warren, D-Mass., would have allowed lower interest rates on student loans by raising taxes for the wealthy. Hatchet File Photo

The Senate voted Wednesday to block a student loan bill that would have given millions of graduates a chance at lower interest rates.

The legislation, introduced by Sen. Elizabeth Warren, D-Mass., would have allowed an estimated 25 million people to refinance the interest rates on their student loans. It also would have lowered rates on federal and private loans issued before 2010 to 3.86 percent.

But the measure was doomed from the start as a tax hike on the wealthiest Americans would have offset the costs of reducing interest rates, prompting Senate Republicans to vote down the bill.

“With this vote, we show the American people who we work for in the United States Senate: billionaires or students,” Warren said Wednesday.

The vote came just two days after President Barack Obama signed an executive order allowing borrowers to cap repayments on their federal student loans at 10 percent of their income.

Obama threw his support behind Warren’s bill in his weekly address Saturday, promising to push for college affordability efforts regardless of the results in Congress.

The White House hosted University President Steven Knapp alongside other higher education leaders last week to discuss the issue with Secretary of Education Arne Duncan and Second Lady Jill Biden. That was Knapp’s second visit to the White House this year, after he also attended a summit on college access in January.

Warren, who attended GW for two years, opposed a student loan bill that passed last year. While the legislation prevented the doubling of federal student loan rates to 6.8 percent, it ended the policy of fixed interest rates on those loans.

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