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. Brad

    Its called the "Rape of America by America"

    July 7, 2013 09:58 am at 9:58 am |
  2. Duriel

    @ ThinkAgain: We don't want our country back because he's black... we want it back because he's an idiot.

    July 7, 2013 09:59 am at 9:59 am |
  3. MaryM

    Wow, the GOP reps telling lies again, I am shock I tell you, shocked !

    July 7, 2013 10:02 am at 10:02 am |
  4. Jamie

    Can we just allow student loans to be included in Bankruptcy? That would be great!

    July 7, 2013 10:04 am at 10:04 am |
  5. dave

    We have people working at Starbucks with a masters degree. This nation needs to have its manufacturing base brought back from China. Only 47% of American's now work full time jobs and Obamacare is only going to make part-time numbers rise when employers over 50 people have to pay employees health care cost. They will cut numbers to avoid this. Too much unemployment and under-emp[loyment in this country and Democrats sold out a long time ago and became globalist. China is not our ally...but our biggest threat.

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

    This issue is like the healthcare issue. The fundamentals are not being talked about. Do we want our best young minds to get higher education or not? Is higher education only for the rich or not? If we want every American son and daughter who has the brains and work ethic to do college work to have that opportunity, we need to design a system of higher education and the means to pay for it that delivers that. Why should they even have to take out loans at any interest rate? Right now, there are Pell grants and need-based scholarships for the very poor and the rich don't have to take out loans. Leaving us lower-to-middle income parents and students to borrow ourselves into crushing debt, as my family has, for our children to get a chance at obs that use their brains and provide a middle-income living. Both my children were HS honor graduates with other accomplishments. We as parents worked, spent and sacrificed for years to make sure they were successful in school and extracurricular activities and enriched their education with outside instruction, summer learning, books, computers, museums, and travel. When it came time for college, what did they/we get? Unsubsidized federal loans and a couple of small scholarships and work/study positions from private colleges. So we had to subsidize their educations with our retirement savings and now help them pay their federal loans because their work incomes are not high enough to cover all their basic expenses plus the loan repayment. If I had known when they were born that there is NO reward for raising and educating children well the first 18 years, I could have retired by now.

    July 7, 2013 10:09 am at 10:09 am |
  7. Burt

    The Republicans, who are these guys? Aren't these the people who the democrats had to fight to keep student loan rates down? Wow!!!!! what a shameful finger pointing!!!! They are now blaming the Democats. Now, the economy is picking up, I am wondering how would they claim credit knowing they have been against all which would have improved the economy, I am wondering how creative they'll get to claim credit or benefit from the uptrend.

    July 7, 2013 10:11 am at 10:11 am |
  8. dave

    I can't get over some of these post about Republicans. You people are blind. Bigger government, more debt, less employment, and more college degrees are not the answer to solving our nations woes. The GOP are no angels, but the Democrats are just as guilty. Do you really think the Democrats of today are still, "The party of the working man"? That ended with William Jefferson Clinton and NAFTA. Neo-Libs like Biden, Kerry, Clinton's, Bradley, and Obama are not true working class Dem's. Give it up people. At least the GOP is doing SOMETHING good for a change.

    July 7, 2013 10:13 am at 10:13 am |
  9. Buford

    Do a quick scan of these posts, and note how many Republicans are spewing illogic and venom. How are we ever going to work with these people?

    For raw ignorance and hostility, grand prize goes to "The sad state of affairs -For all the college kids that voted for the Obama "change" I hope the rates triple.

    For facts that aren't even remotely facts, I'll go with solutionman – "people my age continue to believe that if they work hard and pay half their salary over to the tax man, they're going to be rich". solutionman, you don't pay half of your income in taxes. Nobody does. A student loan payment is not a tax.

    For pointless use of punctuation and capitalization to highlight a post with not a single coherent thought, we'll go with Ray E. Another "Brainless" Program put in place by "Uneducated Idiots".

    July 7, 2013 10:23 am at 10:23 am |
  10. Ray E. (Georgia)

    Oh Gee, I am so amezed,
    I see that some of you want your education for free. Tell me:
    When you get a job are you going to work for free? Some of you want to only pay half proce. Are you going to work for half price? No doubt all of you want to be paid double. So why ask for low interest rates?

    July 7, 2013 10:29 am at 10:29 am |
  11. tom higley

    College costs will continue to spiral out of control as long as the people lending the money are not the ones providing the service. Universities have no skin in the game to control their costs as long as you and I, the taxpayers, are the ones loaning the money. Quite honestly, it should be the colleges loaning students the money. If that was the case, you would see a real emphasis on cost control and preparing students to graduate with the skills to actually repay the loans. The taxpayers should play no role in this whatsoever. It only increases the amount of money being borrowed.

    July 7, 2013 10:30 am at 10:30 am |
  12. Milwaukee Eastsider

    "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"

    This is a republican sayin that. But Jenkins has to realize there's a lot of Obama derangement syndrome amongst her fellow senate republicans. They'll do the opposite of the president no matter what. If Obama told them not to jump off a bridge, they would jump off the bridge

    July 7, 2013 10:32 am at 10:32 am |
  13. dc

    Apparently most Democrats missed the meaning of the entire article except for the Chief Liar, Harry quote at the end....

    July 7, 2013 10:37 am at 10:37 am |
  14. Donkey Party

    The GOP base is comprised of old white men, white supremacists, and low-info, low-intellect voters. Just read the comments here from the right-wing filth, and you'll see how true my words are.

    July 7, 2013 10:37 am at 10:37 am |
  15. don

    Good cop bad cop, anyone thinks otherwise is not looking at the facts. both sides are guilty, I hope most people can see this. Another tactic to divide those demographics, in the mean time both sides are robbing us all blind in back room deals. united we stand, divided we fall. Still rings true today as much as ever.

    July 7, 2013 10:37 am at 10:37 am |
  16. dc

    Sequestration could be minimized if they made Michelle quit taking vacations.....

    July 7, 2013 10:38 am at 10:38 am |
  17. dc

    The impact of sequestration could be minimized if we quit using $50 per gallon "green" jet fuel, and Michelle would take fewer vacations.....

    July 7, 2013 10:40 am at 10:40 am |
  18. Pinkontheinside

    I see the paid demotrolls are out in force on this one. God for it a repub say the right thing. Seriously, we're talking about the cost of college that is so high a prospective student has to get a loan to attend. How much do professors and administrators get paid? Oh, they're liberal democrats, that isn't important is it? It is entertaining but sad to see the greedy liberals eating their own and blaming someone else but that seems to be the norm nowadays.

    July 7, 2013 10:41 am at 10:41 am |
  19. Robin Bray

    In the last election all we heard from the GOP candidates was how they were going to get rid of Fed backed student loans. Their solution was going back to local banks and paying higher rates. Do they all have amnesia?

    July 7, 2013 10:51 am at 10:51 am |
  20. Me

    Once again people are putting this into R vs D's...Do you realize that in the Obamacare bill, they are using part of the student loan interest to pay for it....hence the increase.....get a grip people it is due to the "un" affordable healthcare act that will bankrupt the country!!!

    July 7, 2013 10:55 am at 10:55 am |
  21. Spgfld Tom

    Face it, folks. The Democrats are way too focused on the LGTB community and granting amnesty to 11 million criminals to address this issue. Obama has the printing presses going 24X7 and the Chinese aren't going to finance us forever. We apparently have 70 billion dollars to give to Africa, 2+ billion for Obamaphones and untold billions for ObamaCare. The United States is rapidly becoming the new Greece......what a sad end for the greatest nation on the earth.

    July 7, 2013 10:56 am at 10:56 am |
  22. Richard

    Obama would never raise rates on student loans. He want this Country to have the smartest people in the World. Republicans want to have workers in poverty. Prove me wrong with facts not your Guess at what he wants.

    July 7, 2013 10:57 am at 10:57 am |
  23. stormsun

    I am so tired of hearing about "Congress' inability to solve this problem or that." Neither party has a solution, and neither party IS any kind of solution. The parties are the problem. All these people seem to care about is their party's position...and of course, their own personal advancement. George Washington warned the country about the evils of political parties – he wanted none of it. The American public wants THIS COUNTRY'S ISSUES addressed. Apparently, that is too much to ask from our elected officials.

    July 7, 2013 10:57 am at 10:57 am |
  24. hubert39

    More GOP crying. Why didn't they do something when they had the chance? The Republicans complain no matter what Obama and the Democrats try to do to make our nation a great nation.

    July 7, 2013 11:08 am at 11:08 am |
  25. fayray11x

    exactly what is the rate of big oil give-a-ways?

    July 7, 2013 11:09 am at 11:09 am |
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