The national student debt clock ticked past
$1 trillion today—a fitting backdrop for a vote in the US Senate about
whether to allow federal subsidized loan rates to double on July 1.
Alas, Senate Republicans refused
to allow debate on a bill that would keep loan rates at the current 3.4
percent, and pay for the subsidization by eliminating a sneaky tax
break for wealthy Americans.
The “Stop the Student Loan Interest Rate Hike Act of 2012,”
sponsored by Senate Majority Leader Harry Reid, would lock in the
current rates with revenue from increased Medicare and Social Security
taxes on firms with three or fewer shareholders—known as “S
Corporations.” Some wealthy Americans—like say John Edwards and Newt Gingrich—create
S-Corps in order to treat only a small portion of their total earnings
as taxable wages, thus avoiding the Medicare and Social Security taxes.
Every Democrat in the Senate, along with independent Senators Bernie Sanders and Joe Lieberman, voted
for the bill—but every Republican except three voted against it, thus
keeping it from reaching the sixty-vote threshold for debate.
