Interest rates on student loans are poised to double from 3.4 percent to 6.8 percent Monday.
While Congress has had an entire year to work out a proposal to stop the hike, Republican, Democratic and even bipartisan solutions haven't gained traction in the Senate. With immigration taking center stage on the Senate floor this week, it's unlikely anything will get to the president's desk before July 1 when the rates automatically double.
The House passed the Smarter Solutions for Students Act in May that ties student loan interest rates to market-based rates. Democrats in the Senate said the plan was dead on arrival because it did not give students enough certainty. Under the GOP plan, the loan rate would not be locked in for the loan's life, but would be reset every year depending on the interest rate on U.S. Treasuries.
In the Senate, Democrats are advocating for the student loan rates to be locked in at 3.4 percent for an additional year until Republicans and Democrats can come to agreement. Democrats have suggested covering the cost by closing tax loopholes often used by oil and gas companies.
But Republicans have accused the majority of putting off the matter.
A bipartisan coalition of senators, including Sen. Lamar Alexander, R-Tenn., Sen. Joe Manchin, D-W.Va., and Angus King, I-Maine, unveiled a compromise solution Wednesday afternoon in a last ditch effort to keep loan rates from doubling.
The Student Loan Certainty Act would link undergraduate Stafford loans to the Treasury rates plus an additional 1.85 percent. It would also tie graduate Stafford loans to Treasury rates with an additional 3.4 percent added on. The interest rate assigned to the loan would be locked in for the life of the loan.
"This bipartisan agreement not only makes sure student rates will not double on July 1, but this is a long-term fix that will lower rates for all students and will save students $30 billion over the next three years, making sure anyone who wants an education, can afford one," Manchin said at a press conference Wednesday. "This deal shows the American people that bipartisanship and common sense are alive in Washington. We can find common ground to help our students and ensure the next generations of Americans have the same wonderful educational opportunities that we have always had."
But Democrats in the Senate were not keen on the plan even with a moderate like Manchin pushing it forward.
"There is no deal on student loans that can pass the Senate because Republicans continue to insist that we reduce the deficit on the backs of students and middle-class families, instead of closing tax loopholes for the wealthiest Americans and big corporations," said Adam Jentleson, spokesman for Majority Leader Harry Reid, D-Nev. "Democrats continue to work in good faith to reach a compromise but Republicans refuse to give on this critical point."
The issue has become a political football and the topic of attack ads against members of the House.
Democrats have sought to paint Republicans as protecting the wealthy at the cost of students through an ad campaign on Twitter.
Republicans, meanwhile, have fired back with Facebook ads targeting vulnerable Democrats.