WASHINGTON — The U.S. Senate appears ready to refight last year’s battle over student loan interest rates.

A group of Democratic senators, led by Massachusetts Sen. Elizabeth Warren and including Sen. Al Franken, introduced a bill last week to allow borrowers to refinance their student loans to last year’s low 3.9 percent interest rate (for federally subsidized undergraduate loans). That rate was borne out of a deal setting annual student loan interest rates at the yield of Treasury bonds, plus a few percentage points.

Congress easily passed that plan last summer, and President Obama signed it into law, though it inherently meant rates would rise as Treasury bond yields increased. And that’s exactly what happened last week: bond rates went up, and undergraduate borrowers will now pay a 4.6 percent rate on their new student loans.

The Democrats’ bill allows borrowers to refinance their student loans to the flat 3.9 percent rate, much as a homeowner could do with his mortgage.

Borrowers currently can’t refinance their students loans, which Democrats said Wednesday is unfair given the increase in American student loan debt. At a press conference, Franken told the story about a Hamline University student who will graduate $100,000 in debt, whose loan payments equal half his current income.

“We need to do this, we need to let students refinance their debt the same way that people do on their homes, the same way that everybody is able to do, except for students,” he said.

New York Sen. Chuck Schumer said the Senate will vote on the bill in early June, but it’s unlikely to go anywhere this session. The government stands to lose money by allowing refinancing of student loans, but the senators didn’t know how much on Wednesday. Likewise, they plan to pay for the bill by raising tax rates on millionaires, though they didn’t have an estimate on how much that new tax would bring in. Republicans in the Senate and House — where Minnesota Rep. John Kline chairs the education committee and helped craft last year’s deal — are certain to oppose anything that raises tax rates or otherwise costs the government money.

“This is a matter of values,” Franken said. “There are people who make a lot of money who pay a very low rate on their income. And it’s really about: Are we subsidizing millionaires or billionaires, or are we trying to help our students?”

Democrats have political reasons for bringing up a bill as likely to fail as this one. It’s part of Senate Democrats’ “fair shot agenda,” an effort to force Republicans to vote against potentially popular legislation in an election year. The student loan bill will follow the path set by equal pay legislation and a minimum wage hike — it will fail on the Senate floor, but live on when campaign season begins in earnest.

“There’s a real question here: Does Congress work for the rich and the powerful, for those who can hire armies of lobbyists and lawyers, or does Congress work for the rest of America?” Warren said Wednesday. “We believe the rest of America should have a fair shot at an affordable education.”

Devin Henry can be reached at dhenry@minnpost.com. Follow him on Twitter: @dhenry