Senate leaders on Tuesday reached a deal to prevent subsidized student loan rates from doubling, a compromise backed by the White House but one that still must pass muster in the Republican-controlled House.
The measure is one of two key stalled disputes Congress is rushing to resolve before end-of-the month deadlines, as lawmakers are still negotiating a funding measure for federal transportation projects.
White House press secretary Jay Carney said the administration was “pleased” the Senate reached a compromise on how to pay to maintain the 3.4 percent interest rate on subsidized Stafford loans. The rates are scheduled to double unless Congress acts before Sunday.
While not calling out the House GOP leaders specifically, Mr. Carney implored Congress to “complete the legislative process and send a bill to the president as soon as possible.”
Michael Steele, a spokesman with House Speaker John A. Boehner, said the Ohio Republican would review the plan but didn’t comment on it further.
A senior Senate Republican aide declined to comment on the pending deal because the House has yet to take up the matter.
A 2007 law gradually reduced interest rates on the loans but called for them to shoot up to 6.8 percent this July 1 in a cost-cutting measure. Stopping the rate increase would save 7.4 million students an average of $1,000 a year - a move called for by President Obama in his State of the Union address this year.
Congressional leaders also Tuesday said significant strides had been made on a pending multiyear deal to keep federal highway transit and rail projects funded beyond June, which only last week appeared in jeopardy.
Senate Majority Leader Harry Reid, Nevada Democrat, said that while details still are being hashed out, “over the last 24 hours a lot of progress has been made” on the so-called “highway bill.”
Mr. Reid said he believed a meeting last week with Mr. Boehner “was helpful in helping things move.”
Senate Minority Leader Mitch McConnell, Kentucky Republican, said he’s not certain if the transportation bill will be a multiyear measure, which both parties and Congress want, or a short-term extension.
Both Senate leaders said they will consider coupling the student loan and transportation bills into a single measure, which would make it easier to pass both ahead of next week’s scheduled Fourth of July holiday break.
In March, the Senate passed a two-year, $109 billion highway bill with wide bipartisan support. But the move to renew surface transportation funding stalled in the House, where Republicans rejected their leadership’s five-year, $260 billion version before the measure could even get to the floor for a vote.
Funding for surface transportation projects was to expire at the end of March before Congress passed a three-month extension.
A sticking point is a Republican push to include a provision for the construction of the Keystone XL oil pipeline, which would bring oil from Alberta, Canada, to Steele City, Neb. It has strong support from business and labor groups but is opposed by environmental groups.