First, it was a minimum-wage increase. Next, the Paycheck Fairness Act. And now, Democrats are pitching a bill to address student-loan debt as a women’s issue.
Next week, the Senate will consider a bill from Democratic Sen. Elizabeth Warren that would let Americans with outstanding federal and private student loans refinance them at the same rates students receive when taking out new federal loans.
Students taking out new Stafford student loans pay 3.86 percent on undergraduate and 5.41 percent on graduate loans. The Warren bill would let people with public and private loans refinance their interest rates at those levels.
The bill is the latest in a series of legislative pushes by Senate Democrats intended to rile up their base ahead of this year’s midterm elections. On Wednesday, a cadre of female Democratic senators highlighted the problem of student-loan debt as an issue of particular importance to women, who enroll in college at higher rates than men do. They also argue that women, after graduating, earn less than their male counterparts.
“It’s a one-two punch,” Warren said. “Women take on big debts to go to college but they have less money to pay off those debts.”
And just as with the minimum-wage boost and equal-pay bill, few Republicans will be backing this proposal, making it likely headed for failure in the Senate.
Why isn’t there GOP support? For one, the bill would be paid for through the so-called Buffett Rule, which would change the long-term capital gains tax to ensure millionaires are taxed at at least 30 percent. And raising taxes is a nonstarter for Republicans. (Democrats say they are open to alternative pay-fors.)
The Congressional Budget Office estimates the proposal would reduce the deficit by about $22 billion over 10 years. That’s because the new program would cost $51 billion in direct spending over that period while the Buffett Rule would raise revenues by $72 billion.
But it’s not just the way Democrats propose to pay for the legislation that has Republicans roiled. Republicans will likely argue that the proposal wouldn’t benefit new or existing students, just those with existing debt.
The Senate Health, Education, Labor, and Pensions Committee has spent this year working on a reauthorization of the Higher Education Act, a massive law that deals with federal student aid. Ranking member Lamar Alexander said this particular proposal should be considered in that context.
“We’re going to take three days out next week for a political stunt that everybody knows hasn’t been considered by the committee and won’t pass the Senate,” Alexander said.
He added that he’s examining possible GOP counterproposals to bring up during the debate next week.
Still, Democrats are banking on public support for their policy pitch. Student-loan debt has already surpassed credit-card debt in the U.S., adding up to $1 trillion. And a record-high 37 percent of households headed by someone younger than 40 has student-loan debt, according to the Pew Research Center.
“Republicans would at their peril stop this bill from moving forward,” says Sen. Patty Murray, D-Wash. “We are hearing an overwhelmingly positive response across the income levels, across the age levels, across our states about how important this legislation is.”