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. cbp

    A picture says a thousand words. This woman looks very angry and I certainly would not want to discuss anything with her.

    The political parties cannot find ways to work together. Those who are elected seem to believe that their way is the only way. They tend not to listen to those who serve with them. The prefer to do nothing rather than try to compromise and work together with the opposition. They lack respect for one another and because they are so me-orinted they cannot let go long enough to work on any problems. When AMericans have had enough then maybe we can elect people who know how to work together and to solve issues using ideas from both political parties. We can get beyond this deadlock if we truly wish to do so.

    July 6, 2013 10:12 pm at 10:12 pm |
  2. svann

    Geez, at 6.8% I think you might be better off taking a mortgage out on your home to pay for your kids education. You can probably get a lower rate.

    July 6, 2013 10:16 pm at 10:16 pm |
  3. Jeff

    I say if you serve your country your loan is interest free up to 10 years. Then they should pay a nominal fee for any left over balance. Everyone else should pay 2 to 3 percent. This is one of the best investments this country could ever make except maybe infrastructure. If this excuse of a representative of the American people really wanted to help the country she could work on getting people jobs, instead of voting on abortion or stopping obama care. They really don't give a damn about the country only themselves the rich. They need to control the cost of schooling to begin with, it is getting out of hand.

    July 6, 2013 10:24 pm at 10:24 pm |
  4. Leslie Song

    The spin on this article is pure fiction globbed together with pure lies. The democrats have been trying to protect American students from profiteering bankers, who want to make bucks off their effort to get an education. Bankers who got their bailouts from us. Bankers who get practically free loans – 0.75% interest rates, while our kids are supposed to pay exorbitant rates. Republicans are supporting their banker friends while holding our students hostage. Republicans want to tie their loans 'to the market,' which is a disgusting joke. How about supporting our students instead off milking them, trying to turn them into indentured servants? Why can't they have the same rates as greedy, tax-dodging bankers? My nieces in Europe are getting top notch educations in the Netherlands – whose economy is fine, thank you. They pay 3,000 a year in tuition – that is IT. The Netherlands and other Scandinavian countries SUPPORT their young people and EDUCATE THEM, which is why their societies are good and ours is falling apart.

    July 6, 2013 10:30 pm at 10:30 pm |
  5. rude

    Too late, you have alienated the student vote just like the women vote, Hispanic vote, gay vote and black vote. Yes you built that.

    July 6, 2013 10:31 pm at 10:31 pm |
  6. jamesnyc

    When I was in school, my student loans were fixed rate at 7%. It is so much easier for you to plan your finances for after school if you know the loans won't fluctuate. Student loans are to help students – not to fatten someone else's pockets with excessive interest. Loans should be easy to reduce the principal on so a student can choose to pay it off as soon as possible rewarding the student for paying off the loan early. Student loans should also have the same dispute settlement guidelines as the FCBA and FCRA so that the loan companies are held to accountability in reporting the correct information to the student. The idea should be to incentivise paying the loans off as soon as possible.

    July 6, 2013 10:36 pm at 10:36 pm |
  7. Jeff Edgmon

    It amazes me how some people think just because they achieve a college degree that they're better than other people..LOL.. Who couldn't in this day and age? You have online universities, for profit universities that basically hold your hand through it on every corner. If you greatest accomplishment in life is getting a college degree today, then you haven't done much with your life. I have 2, and it ranks about 8th or 9th on my lifetime accomplishments. Working 30 yrs, facing discrimination every single day, now that's an accomplishment.

    July 6, 2013 10:39 pm at 10:39 pm |
  8. Nursehope

    "Republicans Demand Action" ? When? How about now? Why did they let the deadline expire? More faux posturing to appear concerned. Not buying the crocodile tears lady. Ask your own party why they won't implement Eliz. Warren's plan.

    July 6, 2013 10:42 pm at 10:42 pm |
  9. jeff

    How can ANYONE call themselves an American, and then vote for a political party that was basically endorsed by the Communist Party of the USA? The CPUSA didn't even run their own candidate in 2012, they just endorsed Obama because his ideals, and the ideals of his party, were closest to theirs, so why run their own candidate? Pretty sad what the democrat party has become, and what has become of their supporters.

    July 6, 2013 10:44 pm at 10:44 pm |
  10. Rick

    Remember – Conquer and divide. The banksters are at the root of all of this. They enjoy our petty arguing over this issue. MY question is: As rich as the banks are, why are they making money off of education in the first place?

    July 6, 2013 10:44 pm at 10:44 pm |
  11. ha

    "I have two kids in college, I know how hard it can be"

    says the millionaire whos never seen a student loan in their life

    July 6, 2013 10:45 pm at 10:45 pm |
  12. whitepine

    You are a little late. You knew the deadline but your leader Boehner told you all to go on vacation. Another examples of how you run this country and care about its citizens.

    July 6, 2013 10:53 pm at 10:53 pm |
  13. jo Black

    Gosh we'd better get right on this since they are demanding action. Why the GOP might call another (fund raiser) Congressional hearing if we don't act at once.

    July 6, 2013 11:17 pm at 11:17 pm |
  14. Smeagel4T

    Republicans came to the table with "SIMILAR" ideas. Yeah, you know. Ideas that involved having student loans that had interest rates. "Similar".

    July 6, 2013 11:24 pm at 11:24 pm |
  15. M. Callahan

    Who cares whose fault it is our fault, every American, who have allowed ourselves to be manipulated from the right and left. If the morons we elected, that's right "we" right and left.....are only concerned with getting reelected then our only, I do mean only, concern should be assuring that they do not. Enough is enough.....

    July 6, 2013 11:26 pm at 11:26 pm |
  16. Skeptic

    It might be cheaper if we just import college graduates.

    July 6, 2013 11:46 pm at 11:46 pm |
  17. PRISM 1234

    Don't kid yourself. No matter who is in charge, Democrats or Republicans it is always the people, the Middle class that will be leached and drained dry.

    July 6, 2013 11:48 pm at 11:48 pm |
  18. Lagos

    Republicans don't go along with Obama: Republicans are obstructionists
    Republicans go along with Obama, Congressional Democrats oppose. Republicans are obstructionists

    July 6, 2013 11:56 pm at 11:56 pm |
  19. Phaerisee

    Republicans care about people now? Awesome.

    July 7, 2013 12:05 am at 12:05 am |
  20. Navin Jay

    Student loans should be interest free. CEO's getting fatter on the backs of students. We should value learning over profit.

    July 7, 2013 12:40 am at 12:40 am |
  21. jake

    Vote DEMOCRAT across the board in 2014. It's the only way to save our country.

    July 7, 2013 12:52 am at 12:52 am |
  22. David

    To be clear it is the GOP that are at fault here, the dem plan is much more student friendly.

    July 7, 2013 01:01 am at 1:01 am |
  23. Andy H.

    You mean they want to fix the problem they caused?

    July 7, 2013 01:20 am at 1:20 am |
  24. Perplexed

    The Republican's are great at denying the advancement of the average American's and then crying outrage. They have become a joke and I can't wait to get rid of each and every last one of them. They are holding back progress, especially the jobs bill.

    July 7, 2013 01:29 am at 1:29 am |
  25. Larry

    As usual, the Republicans want to pay for everything on the backs of the middle class and poor. "If your not rich it's your fault" is their mantra.

    July 7, 2013 01:49 am at 1:49 am |
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