GOP Blocks Bill To Extend Low-Interest Student Loans
While not exactly surprising, today's Senate failure to extend a bill extending the currently low interest on student loans, after a blocking vote by the GOP may bring even more attention to what Zero Hedge has dubbed one of the biggest bubbles of 2012.
U.S. Senate Republicans on Tuesday blocked a White House-backed bill that would end a tax break for some private firms in order to fund an extension of low-interest rates for federal student loans.
Republicans prefer to cover the $6 billion cost of a one-year renewal of the 3.4 percent loan rate by taking money from Obama's healthcare overhaul. A compromise is expected. A deal must be reached by July 1 to prevent the loan rate from doubling for more than 7 million students.
The Senate vote was 52-45. Sixty yes votes were needed to move the legislation along.
That there will be politics involved in this touchy subject is not a secret. What, however, will hit the American (young) consumer class (and recidivist iGadget buyer) like a wall of bricks is if on July 1 there is still no deal, and the student protests seen in the recent past in London and Montreal spread to US campuses, where students demand the dignity to file for bankruptcy in peace... and full debt discharge. The counter of course will be whether anyone had put a gun to their head when they were taking out a loan. The counter to that counter will be that no students expected there would be zero jobs available upon graduation. And so on, in a tit for tat repeat of the housing bubble and the massive unexpected consequences as yet another $1 trillion bubble pops, which just like last time, will result in yet another broad taxpayer funded bailout, in which the all end up paying for the the few.
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