The student loan blame game picked up Monday right where it left off, with both parties trading barbs over who is to blame for the recent doubling of interest rates for roughly 7 million new students.

The interest rates on subsidized Stafford student loans, made available to low-income borrowers, doubled on July 1 to 6.8 percent and could mean students who need financial assistance will have to pay thousands of dollars more in interest.

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But neither the missed deadline nor the weeklong July 4 recess did much to push debate along a more productive path.

House Republicans returned from the break and immediately resumed pressuring Senate Democrats to move their preferred approach to lowering student loan interest rates.

“The White House and Senate Democrats have let these students down,” said Speaker John Boehner John Andrew BoehnerLongtime House parliamentarian to step down Five things we learned from this year's primaries Bad blood between Pelosi, Meadows complicates coronavirus talks MORE (R-Ohio). “The House has done its job.”

Meanwhile, Senate Majority Leader Harry Reid Harry Mason ReidSenate Republicans signal openness to working with Biden Mellman: The likely voter sham Bottom line MORE (D-Nev.), who was singled out by House Republicans as the main culprit of the rate hike, pointed a finger at the GOP proposal, calling it worse than simply letting the rates double.

“What they’ve done over there is worse for students than doing nothing at all,” he said on the Senate floor in the first remarks after the break, adding the GOP plan would “balance the budget on the backs of struggling students.”

Pointing out that the GOP bill would not set a cap on how high interest rates could rise, Reid argued the Republican plan could lead to interest rates far higher than where they currently stand.

He announced plans to vote, likely Wednesday, on a bill from Sen. Jack Reed John (Jack) Francis ReedWhen 'Buy American' and common sense collide Hillicon Valley: Russia 'amplifying' concerns around mail-in voting to undermine election | Facebook and Twitter take steps to limit Trump remarks on voting | Facebook to block political ads ahead of election Top Democrats press Trump to sanction Russian individuals over 2020 election interference efforts MORE (D-R.I.), which would return rates to the 3.4 percent level for one more year.

Reid called on Boehner John Andrew BoehnerLongtime House parliamentarian to step down Five things we learned from this year's primaries Bad blood between Pelosi, Meadows complicates coronavirus talks MORE to work to win over Democrats with a similar plan. That bill failed in June to garner the necessary 60 votes.

“The Speaker should work with us and his Democratic colleagues in the House, instead of against them,” he said.

House Democrats got into the mix as well. Minority Leader Nancy Pelosi (Calif.) said in a statement that her fellow Democrats are ready to negotiate and accused Republicans of refusing to compromise.

“They simply pushed their plan to make college more expensive and saddle Americans with more debt — then left town just days before interest rates doubled,” she said.

The Congressional Budget Office estimated that about $28 billion of subsidized student loans would be issued in 2013, good for roughly a quarter of all student loan debt issued.

Poorer borrowers are particularly pinched by the Capitol standoff because the subsidized program is aimed at students who need help paying for college.

A Joint Economic Committee study commissioned by Sen. Amy Klobuchar Amy KlobucharEPA delivers win for ethanol industry angered by waivers to refiners It's time for newspapers to stop endorsing presidential candidates Biden marks anniversary of the Violence Against Women Act, knocks Trump and McConnell MORE (D-Minn.) determined that the average borrower will have to pay an extra $2,600 over the life of the loans under the higher rates.

Republicans see the issue as a political winner.

Senate Democrats have so far not rallied around a bipartisan Senate bill that is similar to legislation that has been approved by the House.

And, as Republicans are quick to point out, the White House has offered an idea for student loans similar to the one put forward by House Republicans and in the Senate compromise.

The latest White House budget proposal would tie the interest rate for the loans to the interest rate for 10-year Treasury bonds, allowing it to rise and fall alongside it.

Meanwhile, Senate Democrats are still pushing a one-year freeze of the lower rates, to buy more time to craft a long-term solution.

“Since the President, Republicans and some Democrats agree on the need for reform and how to reform the system, maybe the Dem leadership will come around and stop attacking the President’s plan,” said Don Stewart, spokesman for Senate Minority Leader Mitch McConnell Addison (Mitch) Mitchell McConnellSenate Republicans signal openness to working with Biden Hillicon Valley: DOJ indicts Chinese, Malaysian hackers accused of targeting over 100 organizations | GOP senators raise concerns over Oracle-TikTok deal | QAnon awareness jumps in new poll The Hill's Campaign Report: Biden asks if public can trust vaccine from Trump ahead of Election Day | Oklahoma health officials raised red flags before Trump rally MORE (R-Ky.). “We’ll see.”

The White House has threatened to veto the House bill despite those similarities.

The administration argues that the House legislation lacks key repayment assistance programs and allows the interest rate to be reset each year, as opposed to locking in when the loans are originated as it would be under the administration plan.

The White House proposal would not raise rates as much as the House GOP plan but does not include the cap on interest rates that Reid mentioned Monday.

The Obama administration has largely taken a back seat in the fight, one year after President Obama made the last expiration date for lower rates a central point of his reelection campaign.

White House spokesman Jay Carney said Monday he hoped Congress would “quickly” lower the rates retroactively, adding that the “differences are not that different” between competing bills.

Meanwhile, a bipartisan group of senators who announced they had struck a compromise in the final days of June are effectively sidelined while leadership haggles.

The lawmakers, helmed by Sens. Joe Manchin Joseph (Joe) ManchinSenate leaders quash talk of rank-and-file COVID-19 deal OVERNIGHT ENERGY: House Democrats tee up vote on climate-focused energy bill next week | EPA reappoints controversial leader to air quality advisory committee | Coronavirus creates delay in Pentagon research for alternative to 'forever chemicals' Senate Democrats demand White House fire controversial head of public lands agency MORE (D-W.Va.) and Richard Burr Richard Mauze BurrRep. Mark Walker says he's been contacted about Liberty University vacancy Overnight Defense: Trump rejects major cut to military health care | Senate report says Trump campaign's Russia contacts posed 'grave' threat Senate report describes closer ties between 2016 Trump campaign, Russia MORE (R-N.C.), announced they had reached a breakthrough, but Reid refused to sign off on the deal.

He argued that because the measure includes roughly $1 billion in deficit reduction, the rates should be similarly lowered to provide maximum relief to students.

That compromise plan would tie student loan interest rates to Treasury bond rates, but at a lower rate than the House plan. It would also lock in the rate when the loans are created, instead of allowing them to change every year.

Reed’s bill would cover the costs of the lower rates by scrapping a handful of tax breaks, including one for tax-deferred retirement accounts used in estate planning.



