Republicans demand action on student loan interest rates
July 6th, 2013
06:00 AM ET
1 year 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. jootjoint

    While you at it GOP, allow parents and students whose annual income is above $60,000 to deduct student loan interest from their federal taxes. Capping student loan interest at $60,000 in order to deduct it from federal taxes will help a whole host of middle income families. Besides, why should I pay $5,000 in student loan interest and Ann Romney gets to romp around on her horse because of an illness is far more immoral than giving hard working Americans a way to reduce their tax obligation to our federal treasury.

    July 6, 2013 04:45 pm at 4:45 pm |
  2. palmer1619

    When did the Republicans get interested in anything but themselves and their donors? Please. do stop with these silly and misinforming headlines.

    July 6, 2013 04:51 pm at 4:51 pm |
  3. OCCUPY WALLSTREET FOREVER

    If the GOP truly demanded action on student loans they'd pass the democrats bill.

    Instead, the GOP wants to tie student loans to regular economic indicators which would eventually increase the interest rate to astronomical amounts.

    The GOP party is a farce looking to maintain the current debt slave system earning their corporate backers billions at our expense.

    July 6, 2013 05:00 pm at 5:00 pm |
  4. Donkey Party

    When the GOP says "compromise", they're saying it's their way, or no way. Today's GOP is more radicalized and better funded than any international terrorist organization, that's why the GOP domestic terrorists are the greatest threat to our nation.

    July 6, 2013 05:02 pm at 5:02 pm |
  5. Questions401

    I seem to recall Obama asking the House to pass something about the student loans a few months ago... Something freezing the rate hike... They said no if I recall...

    July 6, 2013 05:07 pm at 5:07 pm |
  6. donna

    It's an evil loop. They allow anyone to get student loan, then the college realizes that the students are getting more money in loans so the administrators hike up the tuition costs. Then the students have to get more loans, and the administrators hike up the tuition costs, then the students get more loans and the administrators hike up tuition.

    The last thing they should demand is a higher interest rate on student loans since their necessity is what gives students the debt in the first place. Such a sham.

    July 6, 2013 05:09 pm at 5:09 pm |
  7. Craig

    Wait! WHAT???!!! The GOP is trying to say that they give a rat's about the poor and middle class??? Don't fall for it. They DON'T carry about anyone, except their rich handlers. If they really DID care, they wouldn't have turned their back on students when the increase was about to happen. Don't fall for it, they are only trying to BUY VOTES that they don't DESERVE! If the poor and middle class fall for their fake tears, they will DESTROY us when they regain power!!!!

    July 6, 2013 05:09 pm at 5:09 pm |
  8. mark

    see, the ploy is to let other countries worry about issues involving education costs and then keep increasing the cap for H1B workers and import educated workers from abroad. It's brilliant. The dumbing down of America.

    July 6, 2013 05:14 pm at 5:14 pm |
  9. David

    Hey, could you lower my student loan rates as well? I graduated 2 years ago and my loans are also 6.8% K, thanks.

    July 6, 2013 05:19 pm at 5:19 pm |
  10. lizzyq09

    I'm from Kansas and Lynn Jenkins is a joke. She just likes to see her picture and name in the news. She is a total lightweight as a politician.

    July 6, 2013 05:24 pm at 5:24 pm |
  11. Phil Thomas

    You got to love the GOP tie student loans to the market right before interest rates climb. Thank god the Dems are holding out on this one.

    July 6, 2013 05:35 pm at 5:35 pm |
  12. Maria

    The only thing the GOP as right!

    July 6, 2013 05:38 pm at 5:38 pm |
  13. McLovin

    People on here don't even have a clue.Republicans want Democrats to act on legislation that ties the rate to the financial markets. President Obama included a nearly identical plan in the budget proposal he submitted this spring to Congress. Hey liberals, what's changed since 2 months ago?

    July 6, 2013 05:39 pm at 5:39 pm |
  14. livingston

    Sorry, but we aren't stupid. We know that it wasn't the Democrats that stopped it. Once again it was the gop trying to block any help for the American people. Nice try.

    July 6, 2013 05:43 pm at 5:43 pm |
  15. Steve

    Republicans want action. Now that is funny. About the only real action Republicans want is to restrict women's rights or minority voting rights.

    July 6, 2013 05:44 pm at 5:44 pm |
  16. texasnotea

    Republicans are so lame. When the President said something had to be done with student loan interest all the republicans had to do was say they agreed with the President and do something .Instead, they wait until they think nobody is looking and jump out from behind the wall like it was their idea.

    July 6, 2013 05:44 pm at 5:44 pm |
  17. Shawn Irwin

    Some of our representatives act like children in the play yard, passing blame to some other kid, instead of being positive and trying to work out a solution. This lady appears to be one of them. Hats off to the ones who act civilized and mature.

    July 6, 2013 05:45 pm at 5:45 pm |
  18. sunnyjim

    well i see Sarah Palin's
    family is still with us. stupid seems to run in the GOP family. why don't we make your job a volunteer job miss GOP.

    July 6, 2013 05:48 pm at 5:48 pm |
  19. Togas

    The Great Uniter would rather spend the United States money on other countries.

    July 6, 2013 05:56 pm at 5:56 pm |
  20. SeniorMoment

    No deal is possible as long as Republicans insist on making a 2.5% profit on the loans because that offer cause the interest rates to rapidly rise above the current 6.8% as soon as the economy recovers more fully and rates on ten year treasury bonds go back to historically prevalent rates. The loans should also not carry an interest rate that changes once the money to fund the loan has been borrowed by the U. S. Treasury. Student loans are not like other unsecured loans because neither the student nor the parent loans cannot be forgiven absent total, permanent disability that can't be reversed or death of the borrower. I believe these loans are forgiven upon death, but it is possible they continue as a claim against the estate if there is any value in it.

    July 6, 2013 05:58 pm at 5:58 pm |
  21. Maty

    How about funding our public transportation systems and state colleges instead of tax loopholes and bailouts for shareholder owned hedge funds?

    July 6, 2013 05:59 pm at 5:59 pm |
  22. Payourownway

    Interest rates should go to 6.8% for everyone. I am shocked Republicans want to continue this welfare program. Banks earn a return of 6% and 0.8% is allocated to administrative expenses. Why should the children of some taxpayers be required to pay 6.8% and have their taxes used to buy down the rate for the children of other's? We need a flat tax and to get rid of all these methods of picking the pockets of some to give it to others. Let the rate remain at 6.8%, or whatever the market rate is, for everyone.

    July 6, 2013 06:08 pm at 6:08 pm |
  23. mitchgam

    Some, not all members of the Republican party seem to realize that just saying no to any and every idea, alienates everybody and dooms the party and themselves to a limited future. These "radicals" want their party to support something, but don't seem to know what to support without their own party jettisoning them in the next primary.

    July 6, 2013 06:12 pm at 6:12 pm |
  24. Justin

    Like anyone believes the GOP gives a crap about college education. Those "liberal breeding grounds" could go away tomorrow and everyone could just learn from the bible and the GOP would be ecstatic.

    July 6, 2013 06:14 pm at 6:14 pm |
  25. Dan5404t

    Obama was the first to urge action on student loans in several speeches. Now, the GOP comes along and probably will claim it was their idea in the first place. They have done nothing but cut education for a long time.

    July 6, 2013 06:18 pm at 6:18 pm |
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