Lawmakers try to save student loan deal

WASHINGTON (AP) — A handful of senators struggled Thursday to hold together a bipartisan deal to keep student loan rates from doubling on July 1 while their colleagues traded political barbs with little more than a week to go before the deadline.

Top White House officials, meanwhile, told lawmakers they were open to changes in President Barack Obama’s student loan proposal if a compromise could be reached that would win congressional approval.

The behind-the-scenes negotiations were an attempt to head off a rate hike that Congress’ Joint Economic Committee estimated would cost the average student borrower an extra $2,600. Both parties rushed to microphones to point fingers at the other for the potential hike but kept in touch with back-channel efforts that would prevent them from being blamed for adding to already high college costs.

“There’s no question there are discussions going on in the Senate right now, bipartisan discussions. Whether it bares fruit in the next 10 days is going to be a nail biter,” said Rep. Joe Courtney, D-Conn.

The bipartisan deal, which would link undergraduate student loans’ interest rates with the financial markets, would save the government more than $8 billion over the next 10 years, according to an unpublished Congressional Budget Office report.

Democratic and Republican Senate aides insisted on anonymity in discussing the budget office report because it has not been released to the public yet and they were not authorized to discuss it publicly.

The compromise plan was similar to one Obama included in his budget and House Republicans passed. That put pressure on the Senate, where a competing partisan proposal came up short last week.

The new bipartisan proposal’s $8 billion sum was unlikely to win much support from Democrats, who insist that student loans should not be a source of profit for the government. Students loans issued this year were set to bring in $51 billion net gain over the next decade.

The projections, though, could win votes from Republicans who do not want the popular student loan programs to add to the deficit.

The lawmakers who helped craft the deal — Democratic Sen. Joe Manchin of West Virginia, Republican Sen. Tom Coburn of Oklahoma and independent Sen. Angus King of Maine — have not publicly announced the proposal. The Associated Press obtained a copy of the plan and officials stressed that work on it was still underway.

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