WASHINGTON (Reuters) - Legislation to allow student loan borrowers to refinance at lower interest rates failed to clear a procedural hurdle in the U.S. Senate on Wednesday, dooming a measure that was a Democratic priority ahead of November congressional elections.
Democrats had said the bill would let holders of both federal and private undergraduate loans - some with rates of 9 percent or higher - to refinance at 3.86 percent. Republicans thought the legislation was too expensive.
The bill, championed by Massachusetts Senator Elizabeth Warren, was part of Democrats’ plan this year to rally their base supporters ahead of an election that could tip control of the Senate into Republican hands.
Younger voters made up a huge part of the coalition that helped elect President Barack Obama in 2008 and 2012.
The president, during remarks at a high school graduation in Massachusetts, lamented the bill’s failure.
“When a bill to help you pay off your college doesn’t pass, it’s a disservice not only to your generation but to our history as a nation that strives to put quality education within the reach of every American,” he said. “So we’re going to have to keep on putting pressure on Congress.”
Obama signed an executive order on Monday making it easier for up to 5 million people to pay off college tuition debt and scolded congressional Republicans for opposing the legislative fix to lower student-loan interest costs. [ID:nL2N0OQ1IS]
The Senate voted 56-38 on Wednesday in favor of a motion that would have ended debate on the measure and paved the way for a final vote. That fell short of the 60 votes that would have been needed to move it forward.
“Senate Democrats don’t actually want a solution for students. They want an issue to campaign on – to save their own hides in November,” said Senate Republican leader Mitch McConnell.
“Students can understand that this bill won’t make college more affordable. They understand it won’t reduce the amount of money they have to borrow. And students know it won’t do a thing to fix the economy that’s depriving so many young Americans of jobs,” he said.
Senate Majority Leader Harry Reid, in remarks to reporters after the vote, blamed Republicans for the bill’s failure.
Republican opposition has thwarted other Democratic priorities, including a push to raise the federal minimum wage and renew expired long-term jobless benefits for millions of Americans.
Democrats control the Senate, 55-45, but need 60 votes to clear Republican procedural hurdles.
Last year, Congress approved the Bipartisan Student Loan Certainty Act of 2013, which set the undergraduate student loan interest rate at 3.86 percent for the current school year.
Democrats proposed that the cost of the bill be offset by reducing tax breaks for millionaires and cited data showing that student-loan debt grew by $31 billion from January to March to total $1.1 trillion, making it the fastest-growing household debt category.
Additional reporting by Patrick Temple-West and Steve Holland; Editing by Caren Bohan and Dan Grebler