Student Loan Deal Seems on Edge of Falling Apart

By: Associated Press
By: Associated Press

WASHINGTON (AP) -- Senate Democratic Leader Harry Reid says a bipartisan agreement being offered on student loan interest rates is not an acceptable deal.

That could block efforts to dodge a doubling of student loans' interest rates.

Democratic Sen. Joe Manchin of West Virginia on Wednesday said he would introduce legislation with Republican allies that would peg student loans' interest rates to the financial markets. The proposal would set higher interest rates in future years if the economy improves as expected, but would allow students to avoid a July 1 rate hike on new loans.

A spokesman for Reid says the senator cannot support that proposal. Senate Republican Leader Mitch McConnell's spokesman says it is bizarre that Democrats are blocking a compromise.

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