(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.
I'm a Democrat, I had student loans, and I feel if the government can make a small amount on the loans to help pay down the deficit, that is a good idea. There is no free lunch in America, and students should not expect to get loans that are not profitable to the lenders, which is us.
LOL!! They created the mechanics that lead to the interest rate hikes... now that thier kids are the ones being affected they are taking action?
Let the markets set the interest rates without caps? That does not sound like a good idea at all. In a few years from now, students would be looking at 13.6% rates.
Here is a compromised solution, have capped interest rates until at minimum student graduates or leaves school and at maximum 2 years after graduation, then the rate system defaults back to market based variable rates. I agree with both sides, you want rates fixed while in school but then they should be market based just like everyone else has to pay.
So let me get this right. Republicans want no cap, and yet the rate has doubled. Seems like crocodile tears to me. Free market rates on a student loan means they can more than double as they are now. So why not a cap? These are student loans. Not corporate welfare where they don't pay it back. Boo Hoo she has two kids in college. You also have a pension and healthcare for life. Im not fooled. Are you?
Let's rephrase this.
GOP wants the private sector to be in control of all student loans because the private sector, of course, has a history of having the publics best interest in mind.
Typical GOP privates sector profits are their real god nonsense....no thanks.
Our law makers are the worst we have had in decades. They don't care about the people and the students. They all had student loans when they went to college, Now the table has turned and Republicans tell the students get a job, work your way through college. This is the thinking of Republicans now. They are not in a helping mood, but students will remember then when it comes to voting in 2014 and 2016. Defeating them will change the thinking in Congress
Big talk from the party of NO. I bet they are happy that poor students are paying higher rates so that the 1% can get a break.
The market based approach to student loan rates makes sense to me. It makes sense to the President and the Republicans too, it seems. So again, politicians get in their own way. My condolences to the class of 2017.
Congress only works 126 day/year, why doesn't consider to cut the salaries and perks?
The GOP figured out they just lost thousands of future votes from young people? They just lost more women's votes.
I'd prefer a revenue neutral approach. Why do we need to make money off students? Why do Republicans want everything to be thrown to the wolves?(ie "The Market")
Why don't students get interest free loans
in other words the GOP wants to make sure that the banks make money off of the students that are already getting screwed over for their education. The GOP and the President are protecting the banks E. Warren and others are trying to help make education fair again.
Amazing. The Repubs are calling for something they themselves blocked.
Wow, conservatives standing up for students? What crazy world is this? Well I guess they aren't really. They ok with us paying an arm and a leg, they just don't want us taxed on that arm and leg.
Ah, finger pointing as usual with no solid suggestions about how to solve the problem. Typical of the do-nothing 113th Congress. Harry Truman would have had a ball with this bunch.
Congressperson Jenkins is proposing that "market forces" dictate interest rates students will pay on their loans. "Market forces" IS THE PROBLEM. Congresspeson Jenkins is clouding the issue with her rant. For student loans, rates need to be "set by law", not by "market forces". Anyone, like Congressperson Jenkins, who tells you differently, is representing the interests of the financial industry, not student citizens. Shame on Congressperson Jenkins.
Why aren't student loans at prime? Only America looks to make a profit on education. The real profit is in producing students who can contribute in a positive way to our society.
How about a cap on the amount a person can get? Story this past week about a woman who has over $300,000 in loans for a 4 year degree. Since we taxpayers subsidize these loans, I think a limit of $20,000 per year is reasonable.....certainly not $80,000 per year!
Well dems, good morning for a reality check.
Republicans have now made it impossible for people of modest means to go to college. It is another victory for them in their war against minorities, the poor and single mothers.
Good work, Republicans! You are single handedly wiping out the middle class!
No one is stopping any legislator who wants to reduce interest rates on student loans from taking action.
Frankly it seemed like GOP hand out to the banker friends to "let the free market decide" (iel raise rates
and drum up new business markets).
These repubs are so shallow and if you cant see through them then you gotta be blind. They are against gays,,,, but when their kid comes out gay- oh let me recant that. Now that they have to pay more for student loans – Oh maybe we should fix that. If you vote republican you deserve to have any of your issues be yours to deal with and not get fixed- and if you do hope you do. Cause we are in deep doo doo !!!!
Come on Congress. This is such a small thing. Set the rate and make it permanent and not this floating crap. I'm sure Congress will make things retroactive, but this waiting until the last minute and is a bit much. Do something other than carp and complain, Congress.