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. labman57

    Talk is cheap. College, not so much.

    To fiscal conservatives, the "American Dream" is for private enterprise to maximize profits, as the main focus of Congressional Republicans continues to be to seek ways to screw the public and protect the financial interests of the banking industry.

    July 7, 2013 11:13 am at 11:13 am |
  2. Bill Davis

    Oh please, 18 months ago he President asked for action on this and the GOP said no. Then 6 months ago the President asked again. Guess what the GOP said no again go borrow money from your parents. Now they pretend they care about students ots and education. America knows better.

    July 7, 2013 11:17 am at 11:17 am |
  3. frank

    Amazing nonsense from the GOP again. "For too long, politicians have been setting these rates..." Guess what: the banks have made millions of student loans! Maybe we should go ahead and make the banks charge their cost of funds plus a basic spread, like half of one percent. We need to encourage education, not price it out of reach!

    July 7, 2013 11:18 am at 11:18 am |
  4. Thomas

    Mitt Romney Tells Ohio Students: 'Borrow Money From Your Parents' ...

    July 7, 2013 11:19 am at 11:19 am |
  5. Dave

    The Dead Republican party. Permanent minority.

    July 7, 2013 11:27 am at 11:27 am |
  6. Thomas

    The GOP is the Environmental part !

    They like green

    Why not a GOP a pay day lending at 30% for students , the GOP would love that honest hard working corporate loansharking .

    July 7, 2013 11:28 am at 11:28 am |
  7. nycegyrl

    They just as well join the club. Interest rates for credit cards are at an all time high and no one has a done a thing to get them lowered. It has been like this for years, interest rates so high you can barely pay the minimum let alone get them paid off. Heck, a 3.5% rate or even a 6% would be wonderful, that's nothing to balk about. WE all feel it.

    July 7, 2013 11:28 am at 11:28 am |
  8. plain&simple

    Isn't the point of life in this country or in this world for that live well ,eat well,be healthy and love and care for our families? Education improves quality of life. For everyone!!! Not just those receiving the education!!! So America benefits when school doors are opened to the masses...not closed. This is what scares the republicans. Soon a party to be exclusive to the most fearful and ignorant among us. Look at the examples...Perry,Palin,Bachmann....

    July 7, 2013 11:28 am at 11:28 am |
  9. justin

    We need to refinance current federal student loans. Its not all about new loans people. Its a joke.

    July 7, 2013 11:29 am at 11:29 am |
  10. Name willard

    Student college ewas used fraud check scam from afrcian amercian

    July 7, 2013 11:34 am at 11:34 am |
  11. Anonymous

    "Paying for college is difficult enough without all this uncertainty. I have two kids in college, I know how hard it can be."

    Typical of the ultra-right-wing-conservative-"christian"-GOP-Tea-Party-fanatical-extremists hypocrisy. They are all for 'no regulations' and the 'free market' UNTIL it effects THEM and costs THEM money!

    July 7, 2013 11:36 am at 11:36 am |
  12. Darla

    It's shocking how our government races to bail out banks, car companies, and big business....and then they try to make up for the loss by doubling the student loan interest rates for our college grads who often can't even find decent paying jobs! It doesn't take a genius to realize you can't put the burden of balancing the budget on the backs of our struggling college students. The cost of tuition is already outrageous. Pretty soon, no one but the rich will be able to afford college! Our politicians are so out of touch with the average American citizen.

    July 7, 2013 11:41 am at 11:41 am |
  13. rs

    Emblematic in these responses is the disaster that is the GOP. Their supporters parrot a few key notions:
    1. That not everyone should go to college- certainly a reality lacking, elitist view.
    2. That Education and Higher Education in particular are not important- needs no criticism- just a blatantly dumb notion (and they wonder why so many other nations eat our lunch- in manufacturing, invention and innovation).
    3. That somehow education/school loans are a giveaway- and hence automatically evil. Demonstrates huge ignorance of education, and the process by which one becomes educated.
    4. They think that tuition prices are up because of some capricious nature of university presidents- utterly ignoring the fact that GOP Governors and Legislators have been systematically reducing funding to their state schools- and rising tuitions are the result.

    How did people so feckless and clueless ever achieve power in America?

    July 7, 2013 11:49 am at 11:49 am |
  14. Peg

    Trying to shift blame again before this comes down on them. The GOP are the ENTIRE reason rates are going up.

    July 7, 2013 11:52 am at 11:52 am |
  15. truthteller

    Funny that Democrats here are blindly following their leaders when it was the Democrat leadership who doubled the student loan rates to help pay for Obamacare.

    July 7, 2013 11:54 am at 11:54 am |
  16. CG realist

    Wow. The spinsters are out tryi g to blame this on the GOP. Hilarious.

    July 7, 2013 12:04 pm at 12:04 pm |
  17. College Student

    How many of you are currently in college or working with a college student to try and make it through a program? I am going to be a senior in college this year and over the last three years my tuition has DOUBLED from where it started. That's why we need low interest rates. Because we have had to take out more and more and more just to be able to complete what we started, because if we don't complete the program we just wasted all of the money and time we spent trying to get higher education. My lower middle class family hasn't been able to help me AT ALL and so coming up with the money has been on my shoulders. I worked my butt off in High School and graduated 8th in my class, something I am very proud of, and now three years into college I have a 3.9 GPA. Do you think that's possible without working for it?

    July 7, 2013 12:04 pm at 12:04 pm |
  18. TLORop

    Sorry GOP we aren't all as gullible as you think. Every college student remembers every time the GOP blocked a bill that would have prevented this. This once Republican will never vote for one of you again.

    July 7, 2013 12:06 pm at 12:06 pm |
  19. rs

    Funny that Democrats here are blindly following their leaders when it was the Democrat leadership who doubled the student loan rates to help pay for Obamacare.
    Which party is responsible for the huge rise in tuition at state schools? Which party is the anti-Education party?
    'nuff said.

    July 7, 2013 12:06 pm at 12:06 pm |
  20. WeirdMN

    Since the GOP only cares about the wealthy, and the wealthy don't need student loans, color me skeptical.

    July 7, 2013 12:16 pm at 12:16 pm |
  21. Greg Campbell

    Student loan abuse and fraud is at an all-time high, as is the default rate. The federal student loan program is no longer effective. As is the case with most government spending programs, it is too easy to game the system, as students have been doing. They use student loan funds to finance international vacations, purchase high-end electronics, video games, etc. Then they default and complain about interest rates

    July 7, 2013 12:24 pm at 12:24 pm |
  22. Li b.

    Somebody needs to come up with a solution really soon. I don't want my child coming out of college with a lot of student loan debt. IMO I feel there should be something done to stop these colleges and universities from increasing their tuition and stop these high cost of books and the so called "bundle" books that are required for all the classes. Books alone can nearly cost a thousand dollars not to mention the mandatory fees of living on campus, meal plans. Somebody needs to discuss the colleges and universities scamming students into having to get big loans. The government needs to step in since they are giving the colleges and universities this money.

    July 7, 2013 12:30 pm at 12:30 pm |
  23. jon

    the problem isn't the interest rates. it is the obscene cost of tuition itself.

    July 7, 2013 12:32 pm at 12:32 pm |
  24. Jules

    It was the GOP who first delayed it forever and then didn't like the Dems plan. Where's the plan from the House – that's right – they don't have one.

    July 7, 2013 12:39 pm at 12:39 pm |
  25. yogi

    The comments of the righties here are proof that education is essential, especially for them.

    July 7, 2013 12:40 pm at 12:40 pm |
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