The vote was 51-49 in favor of proceeding to debate on the bill but the motion needed 60 votes to pass. The outcome likely will force Senate Democratic leaders to consider a bipartisan plan they have opposed, Politico said.
Stafford student loans are fixed-rate loans for undergraduate and graduate students attending college at least half-time. Rates doubled July 1, from 3.4 percent to 6.8 percent.
Senate Majority Leader Harry Reid, D-Nev., and Sen. Tom Harkin, D-Iowa -- chairman of the Health, Education, Labor and Pensions Committee -- were the main backers of the bill rejected Wednesday. Democrats have been divided on how to deal with the issue, Politico said -- with some backing the Harkin plan and others inclined to support a bipartisan bill.
Opposition to the bipartisan bill is based on concern it will only maintain the lower rate for the first two or three years, Politico said.
"It's a classic bait and switch," Harkin said.
Sen. Joe Manchin, D-W.Va., and Sen. Angus King, Ind-Maine, voted with Republicans Wednesday.
Reid said a compromise bill could be brought to the Senate floor this month, The Hill reported.