Congress tentatively reaches student loan deal

AP Photo/J. Scott Applewhite

Updated at 3:20 p.m. ET

(CBS News) After trading barbs for months over efforts to keep student loan interest rates low, Democrats and Republicans have tentatively reached a deal to extend the current rates, CBS News confirms. The Republican-led House could vote on a new version of the bill as soon as Friday, a source tells CBS News.

If Congress doesn't act by July 1, the interest rate on new subsidized Federal Direct Stafford Loans for undergraduate students will double from 3.4 percent to 6.8 percent. Both Democrats and Republicans (with some exceptions) have agreed Congress should extend the low rates, but they've been arguing for months over how to pay for the $6 billion extension.

Now it appears the two sides have reached an agreement at the eleventh hour for a one-year extension that would be paid for by limiting companies' tax breaks for pension payments and limiting federal subsidies of student loans.

Congress is also close to reaching a two-year extension of a transportation spending bill. The compromise package being finalized is expected to include significant spending and regulatory reforms to satisfy House Republicans. For instance, there will be no increase in transportation funding as Democrats wanted, the bill gives states more flexibility to opt out of requirements for federal transportation funds and it ensures that funds are spent on high-priority infrastructure projects that support economic activity, rather than bike paths and beautification efforts.

"A lot of work has gone into this, it's not finished yet," House Speaker John Boehner said Wednesday morning.

Senate Majority Leader Harry Reid also suggested Tuesday that Congress was close to an agreement.

The transportation bill had been held up by disagreements over authorization of the Keystone XL pipeline, but this latest agreement is not expected to include language to approve the pipeline or force the president's hand on the issue.

The GOP-led House passed a bill to extend the low student loan interest rate earlier, but Democrats -- including President Obama -- opposed it because it paid for the $6 billion price tag by repealing the Prevention and Public Health Fund, which would provide for hundreds of thousands of screenings for breast and cervical cancer. Democrats in the Senate filibustered that version of the bill, while Senate Republicans blocked a Democratic version. The Senate Democrats' bill would have required some privately-owned companies to pay higher payroll taxes for Social Security and Medicare.

[Rmazz93]

The Youths Plan to Create Jobs:
A main problem with our economy today is that many corporations are outsourcing jobs that our high school and college graduates need to start their careers. This leaves a surplus of graduates who are unemployed or underemployed because they cannot find full-time work in their fields of choice.
Have you ever wondered:
Which companies are reducing or outsourcing American jobs?
Which companies are making an effort to keep jobs in America?
We have a solution with SaveOurWorkforce. It is a non-profit organization that tracks information about the American workforce by company, and provides public access to its database through a free website tool; Before-You-Buy, VERIFY. This tool empowers consumers to reward companies by directing their purchases towards those companies that support the U.S. workforce the most. Prior to making a purchasing decision, a consumer can easily access the database to verify if the company or the competitor has been making a strong effort to support the U.S. workforce by retaining jobs in America. Nearly 12.5 million Americans were unemployed as of April 2012, according to the U.S. Department of Labor. The tough job market is causing more and more job seekers to become discouraged. SaveOurWorkforce provides another, more hopeful perspective on the economy by highlighting the companies who are doing their best to provide jobs to the working families of America and by giving teenagers an active role in shaping their future. Teenagers who participate in the high school and college clubs research and reach out to local and national companies to collect information for the database. The SaveOurWorkforce database contains information about 100 large corporations. With help from students, SaveOurWorkforce plans to add 40 companies a month. Please visit the website www.saveourworkforce.org to find more information.

[mreddish]

The student debt situation is definitely one to address, but the amount the raised interest would only affect students by about $8 a month when you do the calculations. However, the government is going to have to come up with some $7 billion to cover the difference. Check out these articles to read more about these calculations and some other ways to try to address student debt:

http://policyinterns.com/2012/06/22/higher-education-and-consumerism-4/

http://americanactionforum.org/topic/legacy-debt

[richardbennie]

Beware the "Individual Mandate" precedent (healthcare was merely incidental to the real object of Individal Mandate); the door has now been opened for the destruction of individual rights and a move toward a predominant oligarchy government.

[baileycccc]

The young people vote was at stake here. The republican only let this deal happen to try to save themselves in November. They won't be sucessful in November.

[anothervoter]

Is there someone we are suppose to appauld over this difficult decision? What is just beyond belief is that might be solved on the very last day!!! Lets give them a special health insurance plan.

[Dan1718]

test

[Dan1718]

test

[realist2010]

Did Republicans actually do something that will help people by mistake?

[TheGodsHead]

Nope, they knew they were losing the argument.