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Student loan debt brings out political crossfire

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U.S. Sen. Joe Manchin, D-W.Va., introduced the "Bipartisan Student Loan Certainty Act" June 26, but the party lines are clearly drawn.

Without any action from Congress, interest rates on new, subsidized Stafford loans will double July 1 from 3.4 percent to 6.8 percent.

Manchin's act, which he introduced with three Republican senators and one Independent, would keep student rates from doubling July 1. Manchin said it's also a long-term fix that would lower interest rates for all students, saving $30 billion through the next three years.

"This deal shows the American people that bipartisanship and common sense are alive in Washington," Manchin said in a statement. "We can find common ground to help our students and ensure the next generation of Americans have the same wonderful educational opportunities that we have always had."

The act would require newly issued student loans be set to the U.S. Treasury 10-year borrowing rate plus 1.85 percent for subsidized and unsubsidized undergraduate Stafford loans for each academic year. The graduate Stafford loans would be 3.4 percent and PLUS loans would be 4.4 percent, with the interest rate fixed over the life of the loan. The act would leave the cap on interest rates for consolidated loans at 8.25 percent.

Rep. David McKinley, R-W.Va., said in a statement June 27 he and the House had already acted more than a month ago and passed a plan that would fix the problem and "take politicians out of the business of setting interest rates."

McKinley was referencing the "Smarter Solutions for Students Act."

"This plan was similar to one offered by President (Barack) Obama," McKinley said. "Instead of finding a solution, the Democrats are using this issue to score political points.

"They are playing partisan games and putting politics above students and families."

But the West Virginia Democratic Party took to the bullhorn June 27 to tell members of the media McKinley and "those like him in the House" are refusing to consider any fair and balanced approach that would fix the problem.

West Virginia Democratic Party Executive Director Jacob Winowich and West Virginia Young Democrats President Abe Saab hosted the call.

"Unfortunately, Congressman McKinley's vote to make students pay more shows that just like always, Congressman McKinley is more into playing the dysfunctional, broken politics in Washington than fixing the problems of hard-working, middle-class families," Winowich said.

Saad said the plan McKinley voted for would send loan rates sky-high when they already cause students and families to struggle.

The Associated Press reported May 22, the day before the House voted, that President Barack Obama threatened to veto legislation that would allow student loan interest rates to vary with the markets.