Liberal firebrand Sen. Elizabeth Warren Elizabeth WarrenNo new taxes for the ultra rich — fix bad tax policy instead Democrats back away from quick reversal of Trump tax cuts It's time for newspapers to stop endorsing presidential candidates MORE (Mass.) blasted a fellow Democratic senator Tuesday as a dispute over student loan rates escalated divisions within the party.

The clash, which is highly unusual among party colleagues in the upper chamber, came at a private caucus meeting about a subject that is helping Republicans land blows against their Democratic opponents.

“Elizabeth came out very strong against Manchin,” said a Democratic senator who requested anonymity to discuss the exchange. “She said, ‘They’re already making money off the backs of students, and this adds another $1 billion.’”

ADVERTISEMENT

Warren was referring to a deal Sen. 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 two other members of the caucus, Sens. Tom Carper Thomas (Tom) Richard CarperDemocrat asks for probe of EPA's use of politically appointed lawyers Overnight Energy: Study links coronavirus mortality to air pollution exposure | Low-income, minority households pay more for utilities: report OVERNIGHT ENERGY: Democrats push resolution to battle climate change, sluggish economy and racial injustice | Senators reach compromise on greenhouse gas amendment stalling energy bill | Trump courts Florida voters with offshore drilling moratorium MORE (D-Del.) and Angus King Angus KingShakespeare Theatre Company goes virtual for 'Will on the Hill...or Won't They?' On The Trail: How Nancy Pelosi could improbably become president Angus King: Ending election security briefings 'looks like a pre-cover-up' MORE (I-Maine), struck with Republicans to peg student-lending rates to the 10-year Treasury notes.

Sen. Tom Harkin Thomas (Tom) Richard HarkinThe Memo: Trump attacks on Harris risk backfiring Ernst challenges Greenfield to six debates in Iowa Senate race Biden unveils disability rights plan: 'Your voices must be heard' MORE (D-Iowa), the chairman of the Health, Education, Labor and Pensions Committee, stood up to announce to colleagues that a fact card passed out by Manchin summarizing his proposal contained two mistakes.

Harkin disputed Manchin’s claim that, under the bipartisan proposal, the interest rates for new Stafford loans would be 3.66 percent. Harkin said that claim failed to reflect that under the Manchin proposal, the rates on undergraduate Stafford loans would hit 7.1 percent by 2019.

Under the law that expired on July 1, the rate for subsidized Stafford loans was 3.4 percent. It has jumped to 6.8 percent and will remain at that level until Congress acts.

Harkin also hit Manchin for claiming the bipartisan plan places a cap on interest rates.

The bipartisan proposal in the Senate would cap student loan rates at 8.25 percent, but only for consolidated loans, not individual ones.

Manchin and his allies, Carper and King, pushed back against the pressure. They took the rare step of holding a competing press conference with reporters in the Ohio Clock corridor while 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.) touted a separate Democratic proposal to reporters. That plan, sponsored by 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.), would freeze the rate for subsidized Stafford loans at 3.4 percent for another year.

The bipartisan plan endorsed by Manchin and the others would set interest rates for undergraduate Stafford loans at the 10-year Treasury rate plus 1.85 percent. It would set the rates for unsubsidized graduate Stafford loans at the 10-year Treasury rate plus 3.4 percent.

It would reduce the deficit by $1 billion over 10 years, which Warren and other liberals have characterized as balancing the budget on the backs of students.

The rival messages appeared to exasperate Sen. Charles Schumer Chuck SchumerDemocrats scramble on COVID-19 relief amid division, Trump surprise Pelosi, Schumer 'encouraged' by Trump call for bigger coronavirus relief package Schumer, Sanders call for Senate panel to address election security MORE (N.Y.), the Senate Democratic messaging chief, who engaged in an animated conversation with Manchin, Carper and King before they met with reporters.

Reid tersely described Tuesday’s caucus meeting as “lively.”

While Manchin, Carper and King stood only a few yards down the ornate corridor outside the Senate chamber, Reid drew a line, declaring he would only back a plan that guarantees student loan rates will remain below the current 6.8-percent rate.

“I’ve told my caucus, I’ve told individual senators, if you can explain to me why doing something is better than doing nothing, then we’ll do it,” he said. “All the proposals, within two years, at the outside three years, make the rate more than 6.8 percent.”

Backers of tying the loan rates to Treasury bonds point out that it would result in lower rates now, but Reid said that interest rates are just now beginning to rise from all-time lows, with nowhere to go but up.

“We have the lowest interest rates we’ve had in the history of this country,” he said. “Interest rates are going to go up, and who’s going to suffer from that? Students.”

After speaking to reporters, Reid planned to meet with Education Secretary Arne Duncan Arne Starkey DuncanThe Hill's 12:30 Report: White House, Dems debate coronavirus relief package For the sake of equity, reopen schools — digitally, with exceptions It's up to local leaders: An Iowa perspective on reopening schools MORE and White House chief of staff Denis McDonough Denis Richard McDonoughThe swamp wasn't drained — it expanded Susan Rice calls for Flynn-Kislyak transcripts to be released GOP seeks to go on offense using Flynn against Biden MORE to further discuss the matter.

Manchin and Carper said they hoped their proposal would receive a vote on the Senate floor, but Harkin said that would not happen Wednesday.

“Why should there be a side-by-side?” he said.

Harkin said Manchin could offer his plan as an amendment if the Senate votes to proceed on the Democratic alternative freezing the rate for subsidized Stafford loans at 3.4 percent for one year.

The Senate will vote Wednesday to end debate on the motion to proceed to that measure.

Proponents of a one-year freeze of the lower, 3.4 percent rate argued ahead of the floor vote that Congress should tackle the rate as part of comprehensive reforms to higher education, coming as part of the reauthorization of the Higher Education Act.

“It will give us time to look at student lending in a comprehensive way,” said Reed.

There were indications Tuesday that Democrats were looking for some sort of compromise, and some may be enticed to join the market-based approach pushed by Manchin and others. Sen. Claire McCaskill Claire Conner McCaskillDemocratic-linked group runs ads in Kansas GOP Senate primary Trump mocked for low attendance at rally Missouri county issues travel advisory for Lake of the Ozarks after Memorial Day parties MORE (D-Mo.), said she could back student loan interest rates based on market movements as long as there are sufficient caps on the rates.

“We might find a sweet spot if we could do a little bit of market, a little bit of caps, and see if we can’t put together a bipartisan group on that,” she said.

And Sen. Bob Casey Robert (Bob) Patrick CaseyGAO report finds brokers offered false info on coverage for pre-existing conditions Catholic group launches .7M campaign against Biden targeting swing-state voters GOP senator to quarantine after coronavirus exposure MORE Jr. (D-Pa.), who is a co-sponsor on Reed’s one-year freeze bill, said he was very interested in finding a longer-term solution.

“I’m willing to listen to anything,” he said. “I think it’s vital we start trying to move forward on a longer-term plan.”

Despite the efforts of Manchin and King, it was clear that some liberal lawmakers would not be swayed.

Sen. Bernie Sanders Bernie SandersSenate 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 Schumer, Sanders call for Senate panel to address election security MORE (I-Vt.), a strong proponent of freezing the lower rates, called the bipartisan bill “totally insane.”

“The American people would laugh at that. It’s not a proposal,” he told The Hill, adding that the administration’s push for a market-based student loan rate is also a nonstarter.

“We should make sure working families in this nation can afford college,” he said. “The White House’s proposal is absurd as well.”

Meanwhile, Senate Republicans looked to keep up pressure on Democrats, again highlighting that the White House has also called for student loan rates tied to Treasury bonds.

Sen. Lamar Alexander Andrew (Lamar) Lamar AlexanderTrump health officials grilled over reports of politics in COVID-19 response Now is the time to renew our focus on students and their futures CDC says asymptomatic people don't need testing, draws criticism from experts MORE (R-Tenn.), who is a co-sponsor of the compromise bill, said a one-year freeze would leave students “twisting in the wind,” and make student loans a regular political football like the so-called “doc fix.”

— Published at 4:56 p.m. and updated at 8:23 p.m.