Senate Rejects Plans To Cut Student Loan Interest

By: Associated Press
By: Associated Press

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Thursday, May 24, 2012

The Senate has rejected Democratic and Republican plans for averting a doubling of interest rates on federal college loans for 7.4 million students.

The election-season standoff means efforts to resolve the dispute will be delayed until next month. Beginning July 1, interest rates for subsidized Stafford loans for undergraduates would double to 6.8 percent without congressional action.

Preventing that increase has been a priority for President Barack Obama.

Senators voted 62-34 against the GOP proposal and 51-43 for the Democratic bill on Thursday, with each falling well-shy of the 60 votes needed for approval of the $6 billion measures.

The Republican measure was paid for by eliminating a preventive health program created by Obama. Democrats would boost payroll taxes on owners of some private companies.

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