Republicans demand action on student loan interest rates
July 6th, 2013
06:00 AM ET
5 years ago

Republicans demand action on student loan interest rates

(CNN) - Rep. Lynn Jenkins, R-Kansas, faulted Senate Democrats on Saturday for this week's hike in student loan interest rates and urged the upper chamber to pass legislation that resolves the issue as soon as the holiday recess ends.

"For too long, politicians have been in charge of setting these rates, and we keep coming back to cliffs and deadlines like this one," Jenkins said in the GOP weekly address. "Paying for college is difficult enough without all this uncertainty. I have two kids in college, I know how hard it can be."

The interest rates on some student loans officially doubled Monday - to 6.8% from 3.4% - after the Senate failed to reach a compromise by the July 1 deadline.

The hike hits about seven million new subsidized Stafford loans this year for middle- and low-income students, but does not apply to existing loans.

Negotiators are stuck largely on the question of whether to require an overall cap above which interest rates on new loans could not rise.

Top Senate Democrats want a cap in place to protect students if interest rates spike. That is at odds with the slightly different proposals from President Barack Obama and various congressional Republicans, which are tied to 10-year Treasury bond rates and would include charges for administrative costs but would not include caps.

Republicans, who prefer a more market-based approach, often point out that the White House's proposal falls more in line with their own.

"When President Obama proposed letting the markets set interest rates instead, the Republican-led House passed a bill reflecting his plan," Jenkins said. "Republicans in the Senate came to the table with similar ideas. Unfortunately, Senate Democrats attacked the president's plan, refused to work with us, and allowed this rate hike to take effect, leaving for the July 4th holiday without passing a solution."

Senators worked through last week to try to reach a deal, but lawmakers from both parties ultimately predicted an agreement would not be made in time.

Nevertheless, many of those same senators said they hope to finalize an agreement shortly after the break and have it apply retroactively so students are not hurt by the temporary hike.

Another disagreement centers on whether the legislation is revenue-neutral. Senate Democrats say the government should not earn any money or pay down the deficit from the loans they provide, something that would happen under the other proposals.

"Republicans continue to insist that we reduce the deficit on the backs of students and middle-class families," Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid, said a week before the deadline.

- CNN's Ted Barrett and Ashley Killough contributed to this report.

Filed under: Congress • Education • Republicans
soundoff (540 Responses)
  1. none

    this entire article has an analogy, due to the fact that it only effects loans that arent taken out yet. It is like staring at a house fire and saying that all smoke detectors in the future should be check often.

    July 6, 2013 06:18 am at 6:18 am |
  2. ME

    Every body goes to college

    Education in the year 2013 -hundreds of thousands of dollars spent on trying to make that 'One Size fit all".

    Education is such a racket these days....

    July 6, 2013 06:34 am at 6:34 am |
  3. noteasilyswayed

    Both sides are equally at fault; trying to place blame on just one side is not going to work; we know they could sit down and work out a good solution if they really wanted to. Please get rid of all of these "lifer" politicians in 2014 and 2016. Replace them with people who will do things that benefit the majority of Americans.

    July 6, 2013 06:37 am at 6:37 am |
  4. Colorado

    She forgot to mention the part of the republican plan that raised the rate to just above 8 percent. Interesting that we allow the banks to borrow at a fraction of one percent but students have to pay and pay.

    July 6, 2013 06:37 am at 6:37 am |
  5. andrew

    True to form the GOP once again takes the lead in blaming all but themselves for this travesty. I truly wonder how the GOP sleep at night..oh wait...vampires don't sleep at night..only during working daylight hours.

    July 6, 2013 07:06 am at 7:06 am |
  6. Proud American

    Republicans causing issues and blaming the democrats for them again.

    July 6, 2013 07:18 am at 7:18 am |
  7. steve851

    The way to fix the loan rate problem is require any college accepting loan money to guarantee repayment. Colleges are the primary beneficiaries of the loan money. They also make the people on Wall Street look like pikers

    July 6, 2013 07:18 am at 7:18 am |
  8. Robert Lemasters

    I graduated from high school in 1968. My first job off the family farm was manufacturing, a locally owned American company. The wages were livable, health care and pensions and the company provided higher education opportunities which many of us gladly excepted as part of our job to make the company and ourselves better... even though I was about to be drafted the company paid for college classes...the company also promised me my job should I want it after my military service. That America no longer exists. We citizens are no longer respected, we no longer have a say in our economy or government... in reality (do the math) homes, health care and higher education often for jobs that do not exist are now no longer affordable for the average citizen.

    July 6, 2013 07:25 am at 7:25 am |
  9. MrRickinNH

    So now after they have played their political games they have decided to close the barn door... shame (as usual)!

    July 6, 2013 07:29 am at 7:29 am |
  10. JD

    Can you say Hiprocrite?!

    July 6, 2013 07:30 am at 7:30 am |
  11. Chris

    Let me get this straight – the Republicans in Congress – whose whole political approach for the last five years has been filibuster, block, delay, and obfuscate – are attacking the Democrats for delays in legislature?

    July 6, 2013 07:31 am at 7:31 am |
  12. Phil

    “Helping more of our young people afford college should be at the forefront of American’s agenda. It shouldn’t be a Democratic or a Republican issue.”

    –President Barack Obama, University of Colorado-Boulder, April 24, 2012.

    July 6, 2013 07:32 am at 7:32 am |
  13. DEvin

    And how is nobody looking into why it is legal for a loan company to sell a student loan to a different company giving the student a higher interest rate to pay off than the one they agreed to in the first place? This whole system is ridiculous.

    July 6, 2013 07:34 am at 7:34 am |
  14. roy

    Rep Jenkins (probably wealtjy) is concerned about the 6.8% student loan rate because she has two kids in college! If the rate reverts back to 3.4% wonder which other rate(s) will get jacked up to make up the difference.

    July 6, 2013 07:34 am at 7:34 am |
  15. BO

    All those young kids who voted for democrats are probably kicking themselves right now.

    July 6, 2013 07:39 am at 7:39 am |
  16. Mike

    You have got to be kidding me, republicans have been standing in the way for months and now they want to act. Please!

    July 6, 2013 07:40 am at 7:40 am |
  17. Mike

    So student rates are tied to interest rate, didnt that cause the housing bubble, adjustable rste loans

    July 6, 2013 07:42 am at 7:42 am |
  18. saywho

    Pot calling the kettle black – nothing new.

    July 6, 2013 07:46 am at 7:46 am |
  19. StopTheMadness

    Yeah sure, let's face facts here 6 months ago this was a non issue for the GOP so much of a non issue they wanted to let it happen and said as much. I swear these people think Americans are not able to remember what they said 6 months ago and I find it hilarious.

    July 6, 2013 07:51 am at 7:51 am |
  20. Darna

    How about congress cut the most bloated, wasteful, overspent, outrageous military budget on the planet, so that our kids can get educated? Or would that make too much sense?

    July 6, 2013 07:53 am at 7:53 am |
  21. nc_mike

    We can't afford these big spending, deficit creating GOPers. Seriously, when it comes to THEIR pocketbooks, the sky is the limit, but when it comes to everyone else only the deficit matters and it is a 'let them die in the streets without medical care' ideology. Freakin' hypocrites!

    July 6, 2013 07:53 am at 7:53 am |
  22. maximusvad

    Nice try Republicans....banks want more profit on a struggling student....ergo your stand is all for show....GOP is the bankers party.

    July 6, 2013 07:54 am at 7:54 am |
  23. thinker

    Typical Republican approach: Hold a program hostage or damage it to the point of it appearing unsustainable, then propose to "privatize" it because government "can't manage it as well as the private sector". Result: Students will end up paying more, just to line the pockets of the banking elite. There is no good reason for this at a time when America needs a better-educated populace. We are lagging behind, and will be left in the dust unless we can innovate, which requires intelligence.

    July 6, 2013 07:56 am at 7:56 am |
  24. mikes

    Stop spending tax dollars subsidizing the higher education industry. The problem is that college is overpriced, not that low interest loans aren't available.

    July 6, 2013 08:06 am at 8:06 am |
  25. eric townsend

    we can sell credit to the banks at 1% but we make the future of America pay 6% that is bull. And then the GOP wants to blame the Dems and vice a versa, but wait we have a holiday coming up so......... lets not do anything. same old same old.

    July 6, 2013 08:07 am at 8:07 am |
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