Democrats’ plan to let Americans refinance their existing student loan debt failed to advance in the Senate on Wednesday, falling to the same fate as other big campaign-centric bills related to equal pay and raising the minimum wage.
In the end, the bill from Massachusetts Sen. Elizabeth Warren went down 56-38, not meeting the 60-vote threshold needed to advance to a final vote. Three Republicans—Susan Collins, Bob Corker, and Lisa Murkowski—joined Democrats in voting for the measure. Senate Majority Leader Harry Reid was the only Democrat to vote against the bill, after changing his vote for procedural reasons.
The bill was part of Democrats’ “Fair Shot Agenda,” their 2014 election-year legislative plan to highlight economic issues that especially affect young people and women, in an effort to motivate voters to back them in November.
Republicans had decried the proposal as a partisan bill, which didn’t go through a committee at the same time that the Health, Education, Labor, and Pensions Committee has been considering the reauthorization of the Higher Education Act, a massive law that deals with federal student aid.
Under the Warren proposal (which has a companion bill in the House), people with existing outstanding debt would be eligible to refinance both federal and private loans at the same interest rates that current students get when taking out new, federal loans. Under a student loan plan struck last year, that means that students taking out new Stafford student loans pay 3.86 percent on undergraduate and 5.41 percent on graduate loans. Every year, the rates adjust for new loans, because the rate is tied to the market.
Letting people refinance their loans would cost $51 billion in direct spending over 10 years, but it would be paid for through the so-called Buffett Rule (the plan to make sure that millionaires are taxed at at least 30 percent). In the end, the Congressional Budget Office estimates that the bill would reduce the deficit by about $22 billion over that same time period.
Following the same pattern as equal pay and minimum wage, President Obama announced executive action this week related to student loans, intended also to elevate the issue beyond the Hill.
But while Democrats had been hoping the failure of the student-loan bill would generate loads of attention, political Washington has been consumed all morning with the shocking primary defeat of House Majority Leader Eric Cantor. Still, they plan to use the bill’s failure as another plank in their pitch that Republicans don’t support working Americans.
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