Minn. Senators bemoan failure to stave off doubling of student loan rate


With the interest rates on millions of federal student loans poised to double on July 1, U.S. Senators failed to approve either of two competing plans aimed at heading off the hike.

The Star Tribune reports Minnesota Democrats Amy Klobuchar and Al Franken expressed disappointment by the failure of a bill that would have locked in the current 3.4 percent interest rate for another two years. That plan received 51 votes, which is short of the 60 needed to overcome procedural roadblocks.

A Republican measure that would have tied the rates to financial markets also failed.

Franken, a co-sponsor of the Democratic bill, issued a statement saying he will keep working to fend off the rate hike, which would affect about 7 million students who take out federally subsidized Stafford loans.

Minnesota Republican Rep. John Kline tells MinnPost the Democratic plan amounts to kicking the can down the road for two years. Kline, who chairs the House Education and Workforce Committee, introduced the market-rate bill that passed the House.

Franken says in Minnesota college graduates walk off campus with an average debt of $29,000.

Bloomberg reports the collective student debt in the U.S. amounts to $1 trillion. Their story looks at the stifling effect that has on graduates' ability to take risks by starting or expanding businesses of their own.

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Minnesota Congressmen Collin Peterson and Tim Walz voted in favor of the $5.9 bill that would prevent the interest rate on federally-subsidized student loans from doubling this summer by cutting funds from part of President Obama's health care law. It now heads to the Democratic-controlled Senate where the plan is dead on arrival. Republican U.S. Rep. John Kline says the legislation isn't perfect, "but it will allow us an opportunity to continue working toward a long term solution."