(CBS News)-- Senate Republicans on Tuesday blocked a bill aimed at extending low interest rates for student loans, signaling the possibility of a protracted congressional battle over a measure lawmakers in both parties agree should ultimately be passed.
In a 52-45 vote, Republican Senators blocked further work on the "Stop the Student Loan Interest Rate Hike Act of 2012," a Democrat-sponsored bill that would extend low interest rates on federally subsidized student loans for another year. Barring an extension, the rate on new loans for undergraduates would increase from 3.4 percent to 6.8 percent this July. Sixty votes were needed to advance to debate.
The White House called the bill's failure "extremely disappointing" in a statement following the vote.
"It is extremely disappointing that Republicans in the Senate today voted to ask millions of students to pay an average of $1,000 each in order to protect a loophole that allows millionaires to dodge payroll taxes," the statement said.
Politicians on both sides of the aisle are advocating for an extension of low student loan rates, which they say would protect more than 7 million students from seeing their rates double.
Senate Republicans, however, object to the way the Democratic bill proposes to pay for the extension. That bill, put forth by Senate Majority Leader Harry Reid and backed by the White House, would require some privately owned companies to pay higher payroll taxes for Social Security and Medicare.
"Over the last two weeks, Senate Republicans have repeatedly claimed they support efforts to keep interest rates low for student loans," Reid said Tuesday in remarks on the Senate floor. "In fact, the Republican presidential nominee has said the same. Democrats have proposed legislation to freeze student loan interest rates for a year without adding a single penny to the deficit. Our plan creates no new taxes... It would simply stop wealthy Americans from avoiding the taxes they already owe."
A GOP filibuster, Reid argued prior to the vote, sends the message to Americans that Republicans would "rather protect wealthy tax dodgers" than struggling students.
Senate Republicans argue Reid's proposal diverts billions of dollars from Medicare and seeks to raise taxes on "the very businesses we're counting on to hire these young people," as Senate Minority Leader Mitch McConnell, R-Ky., contended on the Senate floor on Tuesday. They have put forth their own proposal, which would pay for the extension of the low student loan rates by getting rid of a preventative health fund created under President Obama's health care overhaul.
"This is a perfectly reasonable solution to a problem both parties want to address," McConnell said Tuesday. "It passed the House with bipartisan support. If Democrats want to solve this problem, they should embrace it too -- or at the very least offer a bipartisan solution of their own. The White House has done neither."
Democrats strongly object to such a proposal, which Reid argued would enact drastic cuts to preventative care programs that would "put Americans' health at risk."
"Republicans will try to explain away their 'no' votes by claiming they oppose the way the legislation is paid for," Reid said Tuesday. "They propose radical cuts to preventive health funds instead, a proposal they know that we oppose... we have already cut that plan to the bare bones. We've used this on other programs to cut and we've done it in the right way. Any fluff that was in that program is gone."
Republicans are pushing for a vote on the GOP-sponsored bill, put forth by Sen. Lamar Alexander, which is similar to one passed in the House of Representatives. Such a bill would almost certainly fail in the Democratic-controlled Senate, however, leaving the two parties at a standstill over the matter.
As the Senate faces the possibility of protracted battle over compromise legislation that is politically palatable to both parties, President Obama continues to hammer the GOP on the issue, blasting opponents of the Democratic bill by arguing it would make it harder for the middle-class to send their kids to college and suggesting Republicans are more interested in protecting the wealthy than American students.
In trips to colleges across the country, the president has urged students to call on their Congress members to keep the student loan rates down. On Monday, he held a conference call with elected officials and student government leaders to discuss the same thing.
Meanwhile, the president's re-election campaign is going after presumptive Republican nominee Mitt Romney for claiming to support affordable higher education despite what it casts as a record that proves otherwise.
"Romney won't talk about his record of making it tougher for middle-class families tougher to send their kids to college," said Michigan Democratic Party Chair Mark Brewer in a press call to reporters Tuesday. Romney is expected to deliver remarks in Michigan today at a community college - a move Brewer described as "tone deaf" in light of his record as Massachusetts governor.
Romney, Brewer said, isn't talking about how "on his watch, student fees at state colleges and universities went up 63 percent because of the steep cuts he made to higher education."
"Instead of investing in Michigan students...what Romney will instead do is fight for tax cuts for the wealthiest Americans," Brewer continued.
"This is a candidate who will literally say anything," added Ben LaBolt, Obama for America national press secretary, on the call. "Mitt Romney's message to middle-class students is clear: You will pay more for college."