(CBS News) WASHINGTON, D.C. – On Capitol Hill, the House and Senate have until next Saturday to fund transportation projects for another year, and to renew low student loan rates. A dispute over how to pay for those low rates is keeping the two sides apart.
Like one-third of all college students, Sam Nelson, a junior at George Washington University uses federal Stafford loans to help pay his tuition.
“My greatest concern is that it’ll expire because Congress is just sitting around and it’ll keep going up and keep going up,” Nelson said.
If Congress doesn’t act by July 1st, the current low rate of 3.4 percent will double to 6.8 percent for 7 million new borrowers, costing them an average of $1,000 extra over the life of the loan.
“This issue didn’t come out of nowhere; it’s been looming for months. But we’ve been stuck watching Congress play chicken with another deadline,” President Obama said
Democrats and Republicans have been feuding over how to find the $6 billion needed to keep the rates low for one more year.
“The implication is that Republicans are the ones dragging their feet. As for the president, well this is just another sad example of the election-year strategy of deflection and distraction,” said Senate Minority Leader Mitch McConnell.
A Republican proposal to take the money from a preventive health care fund got shot down by Democrats. But a Democratic proposal to get the funds by closing a corporate tax loophole also went nowhere.
Still, congressional scholar Sarah Binder with the Brookings Institute predicts the two sides will work this out.
“Both parties agree that they don’t want to see an increase in rates, loan rates, particularly right before an election season where students are going to be a vote up for grabs for both parties. It really has finally forced the two parties to say, ‘Let’s sit down, let’s find a way to pay for this,'” Binder said.
The election year pressure may be taking hold. Negotiators have been working through the weekend. On Sunday, at least, some are projecting more confidence that they can reach a deal.