In the wake of the Senate’s passage of the immigration bill the other week, they’ve been trying — and failing miserably — to fill their legislative agenda with an extension of last year’s stopgap that held the interest rate for federally subsidized student loans at 3.4 percent. That provision expired on July 1st, meaning that rates for new loans jumped up to 6.8 percent, and they’re hoping to do something about it before students need to lock up their loans before college begins toward the end of August. The House has already passed a solution that would (quelle horreur!) tie interest rates with financial markets more so than lawmakers’ discretion — a move that President more or less tacitly endorsed in his budget, but the White House is declining to explicitly support — and Democrats refuse to do so without requiring some kind of (completely arbitrary) price cap.

After an earlier measure failed to extend the 3.4 percent rate for two years, the Senate tried again on Wednesday morning with a one-year extension. Nothing doing.

Hoping to avert that outcome, the Senate teed up a test vote on a proposal to return rates to 3.4 percent for one year. Republicans, though, blasted it as a stopgap, “kicking the can” fix that did not address the broader issue.

The bill, which needed 60 votes to advance, failed as expected on a 51-49 vote. …

Senate Democrats are ignoring a bill that House Republicans already passed, while Republicans say the Senate bill is not the solution. …

But chamber leaders so far have refused to take up a measure that passed the House that would link interest rates to the financial markets.

That bill incorporated an idea that was included in President Obama’s budget. The White House, though, has not publicly put its weight behind the House proposal. …

“The president, as you know, is for a long-term fix here, but we are generally for a resolution of this problem because we have already passed the deadline whereby students face a doubling of their loan rates,” White House Press Secretary Jay Carney said. “Supporting a single bill is not the answer here. Supporting a compromise that can get the votes necessary that meets the president’s principles is our position.”

And this latest fizzle only came after much internal agonizing, via WaPo:

The failed key test vote came after contentious discussions Tuesday, much of it between Democrats who have been split on the issue. Senate Majority Leader Harry M. Reid (D-Nev.) met for hours with White House Chief of Staff Denis McDonough and Education Secretary Arne Duncan. At the weekly Democratic caucus luncheon, Sen. Elizabeth Warren (D-Mass.) harshly criticized Sen. Joe Manchin III (D-W.Va.) for sponsoring a bill with Republicans that would tie interest rates for all major federal education loans to market rates but would not impose a formal cap on how high those rates could go in future years.

After that lunch, Reid addressed reporters and stressed that lawmakers need to approve the rate extension instead of not taking action. Reid and other leaders have opposed allowing for an ever-changing interest rate without a stated cap to protect future generations of students from much higher rates. Just steps away, Manchin and two co-sponsors of the other bill hosted their own media event, saying that all students need interest rate relief and senators cannot continue to delay making a decision.

Again, this is all a lot of hoopla for one heck of a pitiful “solution” to the dilemmas facing young people. The real problem here is the tuition inflation that these loan-subsidization policies are directly creating, not to mention the stagnating economy and shrinking labor market into which students are currently graduating (it’s pretty tough to pay off your student loans these days when it’s now a boon to secure even part-time employment!). As the WSJ points out, however, Senate liberals don’t seem to care as much about the damaging effects of this type of legislation as they do throwing a bone to their constituents in the nonprofit academic world. Just business as usual:

As the Senate prepares for Wednesday voting on student-loan subsidies, a coalition that includes congressional Republicans, President Obama and moderate Democrats favors reform that ties the rates on student loans to the 10-year Treasury rate. This protects taxpayers from having to guarantee low fixed rates to students while the government’s own borrowing costs rise. …

But in recent years an historic surge in student-loan debt is changing education for many borrowers from a winning investment into a staggering burden. Such debt has nearly tripled since 2004 and now hovers around $1 trillion, with defaults rising on student loans and other types of debt held by these young borrowers. …

Liberals apologize for the price hikes imposed by their friends in the faculty lounge by pretending that universities are starved for revenue. Rep. Frank Pallone (D., N.J.) claimed on MSNBC on Saturday that “the federal government is not making the investment in higher education.” Perhaps he’s forgotten that annual Pell grant spending of $34 billion has roughly doubled in the Obama era, or that Uncle Sugar now originates more than $100 billion in annual loans. …

No one should be surprised that one of the chief sponsors of this anti-reform bill is Senator Elizabeth Warren (D., Mass.), not even a year removed from her membership on the Harvard faculty. During the August recess she can expect a warm welcome in Cambridge.