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. Notadolt

    No surprise! Michigan Republicans hiked taxes on already-retired pensioners on fixed incomes, then gave tax breaks to wealthy. Republican war on middle class continues.....

    July 7, 2013 02:53 pm at 2:53 pm |
  2. lsr

    I don't understand. Loans in repayment and Parent Plus loans have been at 7.25% for a long time. This is all a public show. Government has been making a good rate of interest on loans in repayment for a long time. No one is getting a break there. Why are these loans different? And by the way, nothing slowed down annual tuition increases even during 2008 and after at approx 8% for each of my three kids in school.

    July 7, 2013 02:58 pm at 2:58 pm |
  3. ditdahdit

    Every Republican effort on student loans has favored the banks and those who trade in loans over the student actually getting the loan. Rep. Jenkins would change her priorities but students don't have billions of dollars to pay back favors.

    July 7, 2013 03:02 pm at 3:02 pm |
  4. DE

    This is all due ro repug tactics; stop trying to blame the democrats for your foot dragging.

    July 7, 2013 03:18 pm at 3:18 pm |
  5. GI Joe

    I love it - the republicans walk away without voting on it, and then DEMAND

    July 7, 2013 03:39 pm at 3:39 pm |
  6. Dude

    My interest rate was 9 percent. Deal with it. Don't get a degree in something useless like public policy.

    July 7, 2013 03:41 pm at 3:41 pm |
  7. Mercury

    The GOP is now going to pretend that it cares about educated people?

    July 7, 2013 03:44 pm at 3:44 pm |
  8. Capt. Tom

    If you think only people on the left are taking “free stuff” you have been watching a lot of foox news. Check out the states where people getting food stamps are on the rise. If you have at least a two digit IQ you will see a pattern.

    July 7, 2013 03:49 pm at 3:49 pm |
  9. Barb

    If the GOP wants to pass something its because it will pay off for them. I don't trust them,GOP, as far as I can throw the
    whole darn bunch. Remember in 11/14 who has been responsible for all the turmoil we have experience the past 2 years. They will say or do anything to get money from the middle class despite what they try to make us believe!

    July 7, 2013 03:49 pm at 3:49 pm |
  10. john west

    this congress is going to break us all! I've never heard of such stuff. leave the students alone and pay more taxes damn it.

    July 7, 2013 03:57 pm at 3:57 pm |
  11. David

    So the Group Of Pharisees think student loan rates are important now? Perhaps they could have thought a bit about this before the bill failed.

    July 7, 2013 04:00 pm at 4:00 pm |
  12. Michelle

    BOTH the Relieorats AND the Demonrats are responsible for this mess this country's in. They've BOTH profited off of the backs of the poor/middle class while the rich get more...more...more. A better solution would be to garish the salaries of BOTH Congresspeople/Senators of BOTH the Relieorats/Demonrats parties until everything's paid off.....they can afford it. I know – fantasy land, but might actually one day become a virtual reality when every person on the planet is poor, thanks to our 'great' government's 'wisdom'(NO WISDOM FROM EITHER WHATSOEVER!!).

    July 7, 2013 04:17 pm at 4:17 pm |
  13. Carol

    Just another Republican smoke-cloud of lies.

    July 7, 2013 04:29 pm at 4:29 pm |
  14. Loki

    ntollowing accurate–if I have it wrong please correct

    the most that you can borrow is $27,000

    10 years at 3.4% is $265.73 per month

    10 years at 6,8% is$310.71 per month

    that's $44.99 per month more

    $5,398.42 over the life of the loan

    not sure when the interest starts–is it when payments start–if so you have a few years of interest free loans

    in any event you end up paying no more than $5,400 more–not excatly end of the world stuff

    July 7, 2013 04:33 pm at 4:33 pm |
  15. RandyF

    The fat cats in the GOP don't want their marginally bright trust fund babies competing against the hard working honest and motivated middle class kids so they have made sure tuition rates can only be paid for by the wealth. Very unpatriotic I'd say.

    July 7, 2013 04:41 pm at 4:41 pm |
  16. geoffmag

    Nothing more than a cynical attempt at political cover. There is no reason why a loan that can never be discharged through bankruptcy should have a reasonable rate cap. Unless one corporate overseers demand more from their bought and payed for pols(GOP and Democrat alike) that is.

    July 7, 2013 04:47 pm at 4:47 pm |
  17. Jeb

    Obama and the Democrats are the ones that lowered the rates in the first place. The only reason they're going up now is because of Republicans playing there usual political games.

    July 7, 2013 04:50 pm at 4:50 pm |
  18. Sheila

    that's just one of the reasons why the kids in texas that are dropping out of high school like flies. Perry just loves to keep the kids at a huge dropout rate – in addition to the fact that the kids are dumber than a sled track, in texas. Th conservatives Just love it, and eat it up, b/c as long as there are people with hardly any education, you can work them to death – not to mention very, very, low wages.

    July 7, 2013 04:58 pm at 4:58 pm |
  19. Andrew

    The part of "no" claims dem obstruction. Good one.

    July 7, 2013 05:01 pm at 5:01 pm |
  20. JZ

    I can't understand the fuss. 15 years ago, I was elated to consolidate my 4 loans at the (then) bargain rate of 8%. @Loki, interest starts depending on whether loans are subsidized or unsubsidized by the govt. Subsidized means the govt pays your interest while you are in school. Unsubsidized means the loans accrue interest while you are in school but repayment doesn't start until you finish or drop below a certain number of college hours. (please correct me if I'm wrong on that)

    July 7, 2013 05:07 pm at 5:07 pm |
  21. Jabbadahut

    If I read the article correctly, obama's policy is the problem and the democraps don't like it. You dum dums, the pres is the one.

    July 7, 2013 05:08 pm at 5:08 pm |
  22. Phaerisee

    I would be interested in Congress passing a bill that cuts their pay every time they drop the ball.

    July 7, 2013 05:12 pm at 5:12 pm |
  23. PK

    This woman makes 138+K a year and she's concerned about her two kids in college! Lord only knows what her husband makes. Heaven forbid, don't help those making less than 50K a year. Oh, right, those kids don't belong in college!

    July 7, 2013 05:18 pm at 5:18 pm |
  24. Phaerisee

    The GOP wants to help people? You don't see that every day.

    July 7, 2013 05:21 pm at 5:21 pm |
  25. blf83

    Duh!!!! But, Repubs, WE WILL REMEMBER YOUR OBSTRUCTION. You let the extremists take over your party because you lack the kahones to work for the people of the United Staes. ZShame, shame, shame

    July 7, 2013 05:28 pm at 5:28 pm |
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