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Student Loan Bill Caught in Limbo

Tom Williams/CQ Roll Call
Senate Majority Leader Harry Reid has proposed a way to pay to keep student loan interest rates at their current rates, but the plan seems stalled, as does the GOP proposal.

In his letter to Republicans, Reid proposed a payfor that already was agreed to by Republicans in a Senate transportation bill. Reid suggested creating fewer tax deductions for pension contributions and increasing premiums that employers pay in to the Pension Benefit Guaranty Corp.

“The combination of these two proposals will provide sufficient resources to fund both a one-year extension of the current student loan interest rate and reauthorization of the nation’s surface transportation programs,” Reid wrote in the letter.

The highway measure also needs to be reauthorized by the end of the month, but short of a deal out of the conference committee, lawmakers may move again on a temporary extension.

The White House issued an emailed statement in response to an inquiry on the progress of negotiations, or the lack thereof.

“We’re confident that if Congressional Republicans are serious about sparing more than 7 million students the equivalent of a $1,000 tax hike, Members of both parties can come together and get this done before rates double in two weeks,” White House spokesman Matt Lehrich said.

At a campaign event last week, Obama cited improved affordability for American college students as one of the key pillars of why supporters should continue to back him.

“I’m running to make sure that we continue on a path of providing the best education possible for every single one of our children, and make sure that we’ve got the highest rates of college graduates of any country on Earth, because that’s going to be the future,” Obama said at an event in Philadelphia. “We’re able to make sure that we can cap the amount of money that folks have to pay back each month on their student loans, because we recognized that a higher education cannot be a luxury.  You can’t just count on the fact that your parents are paying for your college education — a lot of kids need help.  And that’s good for the country.  We’re not going backwards on that, we’re going to keep moving forward.”

Steven T. Dennis contributed to this report.

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