Negotiations on a student loan deal fell through on Thursday after the bipartisan group of senators learned through a Congressional Budget Office report that their plan could cost the government more than $22 billion over the next decade.
Senate Democrats have advocated for interest rates that remain low in the long-term, even as market rates increase, while Republicans have sought to tie student loan interest rates to the market to avoid costs to the government, The Washington Post reports.
The plan negotiated by the group of senators, including Sen. Tom Harkin (D-Iowa) and Majority Whip Richard J. Durbin (D-Ill.), as well as six senators who sponsored the bill, would have capped undergraduate rates at 8.25 percent and 9.25 percent for all other loans.
Student loan rates doubled from 3.4 percent to 6.8 percent on July 1 after Congress failed to reach a deal to address rising interest rates. On Wednesday, the Senate failed to pass a measure that would have allowed lawmakers additional time to design a long-term strategy on interest rates for all federal student loans, according to The Washington Post.