Sen. Elizabeth Warren (D-Mass.) promised Wednesday to keep pushing for student loan legislation after a bill allowing borrowers to refinance their debts failed to come up for a vote this week.
The Bank on Students Emergency Loan Refinancing Act was blocked when Sen. John Cornyn (R-Texas) sought an open amendment process - something Warren, the bill's author, did not want.
The bill would allow more than 25 million people with federal and private student loans to refinance at current lower interest rates of less than 4%. Warren paid for the plan with the "Buffet Rule" a minimum 30% income tax payment from people who earn between $1 million and $2 million.
The cost of the bill would be paid for through tax increases to U.S. high-income earners, a non-starter for Republicans. The tax would offset the cost of lowering interest rates.
The bill previously secured 58 yes votes, two short of the 60 needed to break the Republican filibuster of the legislation. Even if it had passed in the Senate, the bill was expected to face strong opposition from some House Republicans because of the funding source.
Warren called on Senate Republicans to find a compromise that can satisfy both parties in the Senate. She called it a priority for the first 100 days of the next Congress.
Democrats argue that the $1.2 trillion in student debt in the U.S. is stalling economic growth.
"Millions of young people are just stuck," Warren said. "They can't buy homes, they can't buy cars all because they are struggling under the weight of student loan debt."
Warren added that colleges particularly for-profit schools should be responsible for federal loans when students graduate and cant get a job. For-profits receive 25% of federal aid dollars, she said, yet are responsible for half of all student loan defaults.
Warren's proposed bill is part of Democrats' "Fair Shot" agenda designed to highlight the differences between the political parties ahead of the midterm election.
The Obama administration has estimated that the bill could help 25 million borrowers save $2,000 over the lifetime of their loans.
The president touted the legislation in June when he signed an executive order to let people who took out federal loans before 2007 pay no more than 10% of their income in monthly payments.