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. optimistmiser

    Extend and expand loan forgiveness only to all critical skill education that is in short supply currently and projected to be in short supply. Humanities, liberal arts and other non critical skill education should not be eligible for this.

    July 6, 2013 08:09 am at 8:09 am |
  2. Jennifer

    Funny as I recall the GOP wanted the Rates raise to an absurd point....

    July 6, 2013 08:10 am at 8:10 am |
  3. Mary

    Gee, imagine that. The Pubs haven't worked with Democrats in nearly 5 years, and now they're howling the Dems won't work with them.

    July 6, 2013 08:11 am at 8:11 am |
  4. Texasmike

    The hypocrisy of Republicans seems to escalate to more stratospheric levels every week.

    July 6, 2013 08:17 am at 8:17 am |
  5. Realist76

    The reasons markets aren't allowed to set the rates is because they would rise dramatically. If you think 6.8% is high, imagine 28%, or 36%... that's what the markets want. The GOP could have resolved this matter many times over the past half-decade, but they were too busy being opposed to the President and the Dems that the American people elected.

    July 6, 2013 08:18 am at 8:18 am |
  6. Jinx

    All republican representatives look somewhat demented in their pictures, and act the same way when asked a question. There always seems to be a disconnect from reality to fantasy, and from logic to chaos. Why do these people look, and act with such illogical patterns?

    July 6, 2013 08:28 am at 8:28 am |
  7. JIMM

    Really? The GOP is the one who has stalled the entire time.

    July 6, 2013 08:28 am at 8:28 am |
  8. Roger

    Babies. We have a legislature full of babies.

    Here's an idea. Set student loan rates to zero. You want an educated populace? Then facilitate it, you morons!

    July 6, 2013 08:36 am at 8:36 am |
  9. Mike

    It's all a smoke screen. The GOP really does not care about anyone but the rich and the rich can afford college.

    July 6, 2013 08:37 am at 8:37 am |
  10. Mel

    I'm not a republican or conservative but I've always thought that government should not be in the business of financing student loans. It's not the government's role.

    July 6, 2013 08:38 am at 8:38 am |
  11. rino

    As I remember Elizabeth Warren has been fighting the GOP on why they allow banks such low interest loan and why such high loan on Students. So I do not get since when has GOP fought for anything that is american.

    July 6, 2013 08:42 am at 8:42 am |
  12. Dubhly

    wasnt it the republicans that wanted to scrap the student loan program anyway? what better way to do that then to make it so expensive it would no longer be a good idea to use.

    July 6, 2013 08:44 am at 8:44 am |
  13. Ann

    Great. They want to fix they loans that doubled. What about the loans for graduate students that have been fixed at 6.8 and 7.9% for years?

    July 6, 2013 08:46 am at 8:46 am |
  14. MichaelK

    Yeah THATS right. Blame the Democrats for your blunders and greed. Brilliant.

    July 6, 2013 08:48 am at 8:48 am |
  15. Ron

    Forget the interest rates.......IT'S THE OUTRAGEOUS RISING COSTS, DUMMIES!! Soon brick & mortar colleges will be GONE and on line degrees will be the mainline. Then all the colleges, their boards and their overpaid professors can take all their expensive toys and go to hell! HOW MUCH MONEY IS ENOUGH AT THE COST OF THE POOR?

    July 6, 2013 08:52 am at 8:52 am |
  16. Jeff

    I finally agree with the GOP,on something. The rise in the student loan interest rate is ridiculous. However, I have a difficult time believing the GOP due to the time spent on attempting to repeal the Affordable Care Act, and the numerous press conferences following the recent Supreme Court opinions. Rather than spending time pandering to their donors through press conferences and message legislation, spend time fixing problems like the student loan rates. You might just get this young voter to punch a GOP ballot.

    July 6, 2013 08:52 am at 8:52 am |
  17. rla

    Yep and the republicans jump on another democratic bandwagon-- Why is the government paying for art history majors???????

    July 6, 2013 08:53 am at 8:53 am |
  18. Gary

    How about tackle the real problem... Inflated costs at colleges today??? Oh wait we like band aids for our current problems...

    July 6, 2013 09:00 am at 9:00 am |
  19. Dave - Phx

    If you wanted action you shouldn't have went on recess. What a joke, and what a lie.

    July 6, 2013 09:02 am at 9:02 am |
  20. McRCN

    The only students that should get a break are ones graduating with degrees we actually need like math and science. I have a friend and their son will have $80K in student loans and he is getting a history degree. Sorry, but if you get a history degree you should pay the market rate for a loan.

    July 6, 2013 09:03 am at 9:03 am |
  21. Zerubbabel

    They should demand of themselves action on a jobs bill, the sequester, voting rights, immigration and a farm bill. They should act in a way that leaves people's dignity intact, considering the fact that it is their policies and positions and obstruction that have us in the state that we are in. The only bills that they can pass are repeal of the PPACA and bans on abortion. What a pathetic lot the party of Lincoln has become.

    July 6, 2013 09:05 am at 9:05 am |
  22. Dave H

    She makes $174k per year. Her ex-husband, Scott, makes good money also. They have only the two children between them, yet she claims "I have two kids in college, I know how hard it can be." No, no you don't. You want to find out how hard it can be? Drop your combined salaries down to $80k (or less), tack on a mortgage and pay full taxes like the rest of us. Then, perhaps I'd listen to you. Until then, shut your pie hole. You're clueless about what it's like, as are most politicians.

    July 6, 2013 09:06 am at 9:06 am |
  23. Koboldmom

    Well if the Republicans ever decide to do some work, that dosent involve legislating my uterus or voting yet again on Obamacare, maybe they can get around to this.

    July 6, 2013 09:07 am at 9:07 am |
  24. John

    Wait, what? Now the Republicans are saying the Democrats raised rates and don't care about student loan costs? After 3 1/2 years of bad mouthing Dems for wanting to further lower rates and attempts at loan assistance? These people truly are nuts.

    July 6, 2013 09:14 am at 9:14 am |
  25. Stop the craziness

    Back to the DO NOTHING congress is playing with people lives. When are the public going to wake up and vote out these politicians?

    July 6, 2013 09:14 am at 9:14 am |
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