WASHINGTON (Reuters) - Lawmakers scrambled on Thursday to introduce last-minute bills to keep student loan interest rates from doubling on July 1, but even supporters doubted any measure would pass in time.
Only one legislative day remains before interest rates on millions of new federal student loans are due to double to 6.8 percent.
One bill by a group of Democratic senators would extend the lower rates for another year while lawmakers work on a longer-term solution.
“It would give us the time and the incentive and I hope the inspiration to look at this whole issue of financial debt and student debt in a comprehensive way, not just tinkering on the edges in terms of rates,” said Democratic Senator Jack Reed of Rhode Island at a press conference.
But even these Democrats appeared doubtful that their bill would pass before the deadline. Instead, they talked of working retroactively and voting to move their bill forward on July 10, after Congress returns from a recess.
A bipartisan group of senators also introduced a different bill indexing interest rates to the U.S. Treasury 10-year rate plus 1.85 percentage points for subsidized and unsubsidized undergraduate Stafford loans.
The group includes West Virginia Democrat Joe Manchin, Republicans Richard Burr of North Carolina, Tom Coburn of Oklahoma and Lamar Alexander of Tennessee, and Maine Independent Angus King.
Their plan would reduce the deficit by $1 billion over a decade. Supporters argue moving to a market rate would also allow students to take advantage of currently historically low interest rates.
That bill mirrors another Republican bill that passed in the House of Representatives in May, but continues to be criticized by Democrats and has been stalled.
Lawmakers have known about the interest rate deadline for a year, after postponing the issue last summer. What has emerged instead is finger-pointing.
“As a result of their (Democratic) obstruction, interest rates on some new student loans will increase next week. The Republican House has already passed legislation and Senate Republicans, along with the President, are ready to pass bipartisan student loan reform that will ensure that student loan rates don’t double on July 1st,” a spokesman for Senate Minority Leader Mitch McConnell said in a statement on Wednesday.
By midweek several lawmakers had switched their tones from hopeful to pessimistic.
“This is not going to be pleasant,” Representative George Miller, the senior Democratic member of the House Education and the Workforce Committee, told Reuters. “Students and their families are not going to be happy about this.”
Reporting by Elvina Nawaguna; Editing by Karey Van Hall and Leslie Gevirtz