Senate Dems. Counter GOP Student Loan Interest Rate Proposals
Senate Majority Leader Harry Reid (D-NV) sent a letter to House Speaker John Boehner (R-OH) and Senate Minority Leader Mitch McConnell (R-KY) to offer a proposal to pay for a one-year extension of student loan rates to prevent them from doubling on July 1.
Reid's proposal would reduce business tax deductions for pension contributions and increase premiums paid by employers for the insurance provided by the Pension Benefit Guaranty Corporation (PBGC) to cover the cost of extending the 3.4 percent interest rate on subsidized Stafford loans.
The pension proposal was included in transportation legislation that garnered Republican support in the Senate, but hasn't been passed in the House.
"I suggest that we use part of these offsets to pay for the student loan legislation, and pass that measure immediately so that middle class families will not see their interest rates double on July 1st," Reid wrote in the letter. "The remainder of these offsets will still be available to finish completion of the transportation jobs bill once the conference committee completes its work."
Reid's proposal comes on the heels of two proposals House and Senate Republican leaders sent to the White House. In a letter to Obama, Republicans offered two new proposals to cover the $6 billion cost of extending the 3.4% interest rate for another year.
The first proposal would increase the amount federal employees contribute to their retirements.
The second proposal would:
- Limit the in-school interest subsidy to 150 percent of program length (President Obama proposed this in his FY 13 budget request)
- Revise Medicaid provider tax threshold
- Improve collection of pension information from states and localities
Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.