The U.S. Senate on Thursday thwarted two rival bills aimed at stopping interest rates on millions of federal student loans doubling in less than a month.
The defeat of the Democrat and Republican bills will likely lead to a partisan showdown ahead of the July 1 deadline. Both sides agree student loan rates shouldn’t go up. They remain gridlocked on a way to avert that.
A Republican plan to switch to a market-based interest rate system and a Democratic bill to extend the current lower rates for another two years failed to garner the 60 votes each needed to advance.
Student loan debt in America now surpasses $1 trillion, according to the U.S. Consumer Financial Protection Bureau, and is already hindering young people from making important economic decisions such as purchasing new homes or cars.
Last year lawmakers agreed to extend a previous rate-increase freeze on student loans for another year. Unless Congress comes to an alternative agreement, interest rates will double to 6.8 percent on July 1, adding an extra $1,000 to borrowers’ payments every year.