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. PS

    jootjoint – I like your thinking!

    July 6, 2013 09:07 pm at 9:07 pm |
  2. Larry L


    America is divisive. The line has been drawn..
    The "line" was required for the top 1% to retain enough votes to maintain the Republican Party. Do the math... Karl Rove was one who understood from the beginning. The GOP needed hot-button topics that didn't cost the wealthy money but energized the fearful, bigoted masses. All of the effort went to guns, gays, God, xenophobia, and abortion. The hate media whipped folks into a frenzy of hate and racism. Now the GOP can't win a general election because they've crossed over the line too far – too radical and hateful for moderates.

    July 6, 2013 09:10 pm at 9:10 pm |
  3. wm Scot

    The Senate Democrats are stalling the bill ???? Really ??? Must be that the GOP wants to make sure the banks get all the interest they can get !

    July 6, 2013 09:11 pm at 9:11 pm |
  4. Larry B.

    "It all comes back to haunt you...." Courtesy of John Hiatt, master American storyteller. And it sure has to the Republican Thugs.

    July 6, 2013 09:17 pm at 9:17 pm |
  5. remember

    Most of this division started when the town hall meetings for Obama- care were taking place and FOX news told the people "shout them down" "don't let them talk" now everyone lowered themselves to that level.Now there is no more working it out,and no one likes when it happens to them (Texas) but its fine while they use the shout them down tactic.So now every thing will be done behind closed doors,wether legal or not.So the lawyers will make all the money,USA sinks deeper.

    July 6, 2013 09:24 pm at 9:24 pm |
  6. Don on the prairie

    GOP pretends to want action on student loans....

    July 6, 2013 09:28 pm at 9:28 pm |
  7. DeepeThought

    If it goes like so many times in the past, the president will want to sneak another bad law in with the bill, the Republicans will not vote for it because of the new item, and the press and naive will blame the Republicans.

    July 6, 2013 09:32 pm at 9:32 pm |
  8. dlb19595

    Let's have a mixed party political systems where only the best man for the job win's no matter which party he tired of the two party system! It gets us NO WHERE!

    July 6, 2013 09:32 pm at 9:32 pm |
  9. remember

    Tea party shows up the very first election after "COMPANIES ARE CITIZENS" ruling from supreme court.
    Lets see one more dollar profit today and wreck the country-or look down the road and make things better.....TAKE THE DOLLAR

    July 6, 2013 09:33 pm at 9:33 pm |
  10. um

    really? they care about the Loans now? Obama brought up the LOANS and they all instantly chose the OPPOSITE...
    are they done with their Shariah laws against women yet?

    July 6, 2013 09:39 pm at 9:39 pm |
  11. remember

    Funny how the sequester was going to be across the board but some how they are finding money for only select programs.So the very thing that was going to be so bad both parties would work together to make sure it would not happen,has no teeth.We are screwed we need a NEW PARTY a real new party!!!!! Should have 3-4 parties not 2.

    July 6, 2013 09:40 pm at 9:40 pm |
  12. rickapolis

    Yeah, sure, all the economic problems are the democrats fault. Bwahahahahahaha.

    July 6, 2013 09:42 pm at 9:42 pm |
  13. rickapolis

    If GOP could stop talking and start governing we could actually begin moving forward as a nation.

    July 6, 2013 09:44 pm at 9:44 pm |
  14. LOfromMO2012

    Why should I help pay loans that someone else signed and committed to?
    I have no problem paying what I committed to. However, I did not sign up to pay DOUBLE the interest rate that my original contract said I obligated toward.

    July 6, 2013 09:44 pm at 9:44 pm |
  15. Leah K.

    The GOP doesn't give a rip about college kids. To them, education isn't necessary for our workforce to compete only makes people 'snobs'.

    July 6, 2013 09:47 pm at 9:47 pm |
  16. Bo

    Dems just want to keep students dumb so they get more votes.

    July 6, 2013 09:47 pm at 9:47 pm |
  17. remember

    The only reason Rep. Lynn Jenkins cares is because "I have two kids in college, I know how hard it can be."They only seem to care about PEOPLE when it happens to them personally.Just like gay rights.If they thank 2+2=5 you can not prove they are wrong,until they needs to know for personal reasons,abortion?
    They should say what they really want with voting- no women should be allowed to vote,or blacks,or jews,hispanics,or union members,and only people that companies hire for that one day (at a tax break) should be allowed to vote.

    July 6, 2013 09:48 pm at 9:48 pm |
  18. Monty Burns

    When repubs say they want a market based approach, clench your cheeks tightly. You know where their paymasters in the banks and big business are trying to guide the "market."

    July 6, 2013 09:56 pm at 9:56 pm |
  19. Big_D

    What a joke. The GOP has refused to pass the law that would tie the rate to the rate they lend to banks at and the GOP flatly rejected it. Now they are the ones wanting action? That is rich! So are the bankers the GOP is trying to get donations from.

    July 6, 2013 09:58 pm at 9:58 pm |
  20. Scott Hunter

    Give us a break. Th Republican party has come to represent those that 'have' in the US. To find them now wishing to help students from families that 'Have Not' now, seems absolutely improbable! And so it's either a purely political ploy, or again due to a complete and utter mus-understanding of where America and our childrens' educations and abilities stand in this world. In this case, it's probably both. Wake up and get real.

    To think I live here with these folksl.... Perhaps Bejing will annex us.

    July 6, 2013 09:59 pm at 9:59 pm |
  21. Anonymous

    I think these loans should be forgiven for students with a B average or above and the interest rate lowered to 3 percent for everyone else. Education is an investment not only in the individual but also the country every bit as important as our highway system and the defense department.

    July 6, 2013 10:01 pm at 10:01 pm |
  22. wesmorgan1

    I don't much like the idea of "the market" setting the interest rates. We've seen–all too many times–how "the market" handles things; remember 2008, folks?

    If you REALLY want a create solution, take a look at Oregon's "Pay It Forward" idea. Seriously, go check it out; it's RIDICULOUSLY straightforward, much less burdensome to the students AND easily implemented. If only the clowns in DC could step away from their power games for just a few days...

    July 6, 2013 10:01 pm at 10:01 pm |
  23. Big_D

    The first thing we need is real campaign reform so the rich folks quit buying the GOP. The Koch brothers pay almost no taxes thanks to back room deals that should be called bribes and they are polluting like mad. I think the GOP politicians should be held as accessories when the Koch brothers finally face the music for their environmental crimes.

    July 6, 2013 10:02 pm at 10:02 pm |
  24. Scott

    Surely everyone can agree that education is a good thing; that getting a college education increases individuals' earning power and therefore lowers costs to gov't and to society in the long run. Based on these facts, college loans should be interest-free.

    July 6, 2013 10:12 pm at 10:12 pm |
  25. Disheartened GOPer

    The current crop of Republican leaders tell lies that are more and more absurd. No wonder they have little, if any, credibility. I mean does anyone actually believe that they care about students? Does anyone even pay attention to their "it's the Democrats fault" mantra?

    July 6, 2013 10:12 pm at 10:12 pm |
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