“Students across this country would rather have no deal than a bad deal,” Reed said.
The proposal Reed rejected had support from Republicans, but also at least one prominent Senate Democrat. Its key provision is that it would link future student loan rates to the interest rates in financial markets.
President Barack Obama’s 2013 budget proposal also suggested a switch to a market rate-based approach. At the moment, because interest rates are generally so low, that solution would raise student loan rates to about 4.5 percent. But as the economy strengthens and future interest rates rise, students would likely end up paying considerably more.
The president’s posture is a marked departure from only a year ago when, looking to woo young voters on the campaign trail, Obama called it a “no-brainer” to keep student interest rates at 3.4 percent. Both political parties, in fact, supported holding rates steady last year.
Privately, some congressional Democrats have grumbled that Obama’s new position forced the interest-rate negotiations to the right. Some Senate Democrats continue to hold out hope that in the coming weeks, a deal can be worked out to keep interest rates at 3.4 percent for one more year, with a long-term solution negotiated as part of an upcoming wide-ranging higher education bill.
Though Florida’s in-state college tuition is still cheaper than most states, tuition at schools like FIU and the University of Florida has more than doubled in the past decade. And Florida’s state lawmakers have joined the federal government in cutting back on student aid, with the size and scope of the popular Bright Futures scholarships being steadily reduced year after year.
At the same time, student debt in Florida has consistently grown. More than half of Florida students who graduated in 2011 had student loans, according to The Project on Student Debt, with the average student owing $23,054.
Miami Herald writer Benjamin Brasch contributed to this report, which was supplemented with material from The Associated Press.