With a July 1 deadline approaching, Senate Democrats and Republicans remain at odds over how to pay for legislation that would avert the doubling of interest rates on student loans as the chamber rejected competing proposals Thursday.

The Senate, for the second time, defeated a Democratic student loan bill that would cover the $6 billion cost of preventing the rise in interest rates by eliminating a corporate tax provision that allows some of the highest income earners to pay less than they would otherwise in Social Security and Medicare taxes.

The bill won a majority — 51-43 on a party-line vote — but needed 60 votes to pass. Sen. Olympia Snowe (R-Maine) voted present.

That was the second time the Democratic proposal failed to muster 60 votes. Earlier this month, a vote to cut off debate on taking up the bill was defeated 52-45.

Republicans, backed by business groups, oppose the offset, arguing the higher taxes would make employers less likely to hire.

Senate Republicans prefer the offset used in the bill passed by the House last month, which would eliminate what GOP critics call a “slush fund” in the 2010 health care overhaul that covers prevention and public health.

The GOP plan fell 34-62, with 10 Republicans voting against the measure.

Sen. Jim Inhofe (R-Okla.) was succinct in explaining his no vote: “Since it’s not going to pass anyway, what difference does it make?”

President Barack Obama opposes the GOP offset and has threatened to veto the Republican version.

Congress has until July 1 to act to extend the current 3.4 percent interest rate on Stafford loans. If the law expires, the rate reverts to 6.8 percent.

About 7.4 million people would be affected, at an average cost of about $1,000 in interest for each year the higher rate is in effect, according to the Department of Education.

Republicans argue that the health care fund offset was already endorsed by Democrats and Obama when it was used to help pay for the payroll tax cut extension in February.

Democrats maintain there is no more room to cut the fund, which they argue will save money by helping treat illnesses before they become chronic.