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. Bill

    Why are students, who typically have little money since they're trying to set themselves up for a career, charged seven times more in interest than banks, which recently received billions of dollars in bailout money?

    July 6, 2013 10:07 am at 10:07 am |
  2. Quasi

    The Republicans want a "market-based" approach to interest rates so they can further rob the kids of their futures.

    July 6, 2013 10:07 am at 10:07 am |
  3. glorydays

    Now that vacation is over.

    July 6, 2013 10:07 am at 10:07 am |
  4. TLORop over the past year Republicans have repeatedly blocked legislation that would have kept interest rates low and they blame Democrats?
    Things that make you hmm.

    July 6, 2013 10:08 am at 10:08 am |
  5. MrCrewel Dude

    Yeah, Congress do some 2 earn your fat cat paychecks.

    July 6, 2013 10:13 am at 10:13 am |
  6. Jeff Kelly

    A person is a pure reflection of what they 'really' want. 4, 6, or 8 years of hard work, study, and planning can be very lurcative and rewarding. 4,6, or 8 years or more of continuous partying obviously tends to leave large debts that can't be repaid due to the lack of true education.
    The GI Bill is an excellent means to get a good education. Encourage, them serve their country, give them a chance to mature a little more. Gain some real life experience. Learn leadership skills businesses so badly want.
    Who really needs student loans?

    July 6, 2013 10:20 am at 10:20 am |
  7. sbul

    Political double speak: Until this GOPer made this statement it was the GOP that was blocking action on student loans, now they want to blame the Dems. Go figure.

    July 6, 2013 10:28 am at 10:28 am |

    Why should I help pay loans that someone else signed and committed to? No different then people who get an ARM mortgage. Not my problem. And taxes should not help them out period. Whatever happened to the way it was when you cigned your name for a loan, you were responsible??? We are becoming a hand out country!! What's next, can't afford your car payment? Visa card?? Just call the Government we will help you??

    July 6, 2013 10:29 am at 10:29 am |
  9. tony

    Another recipient of a fantastic government paid medical plan and life time pension after just a single day's work, complaining about too much government.

    July 6, 2013 10:29 am at 10:29 am |
  10. Gerry

    Well of course the Repub's would blame the Dems.... What's new? It seems to me THE President's rhetoric isn't matching his plan. While he doesn't say he is wanting to pay the deficit with the student loan interest, it certainly seems that way IF he is going along with the Repug's plan. Thank you Democrat Senators for trying to look out for our children. I don't understand why this government doesn't look into the plan Oregon uses for their collage kids. Seems like a very good one to me. It's also interesting that the lady Rep. from Kansas didn't get vocal about the interest rates until HER children were involved..

    July 6, 2013 10:32 am at 10:32 am |
  11. Dan5404t

    Now, this is one that calls for real; compromise, a word that isn't recognized in Congress.

    July 6, 2013 10:34 am at 10:34 am |
  12. Mike

    Funny how they're trying to shift blame away from their party ...

    July 6, 2013 10:36 am at 10:36 am |
  13. Jill-IN

    Who is she kidding? The GOP want a market based approach with variable rates (we all know where that would go – up and into the pockets of the big investment banks).

    July 6, 2013 10:36 am at 10:36 am |
  14. Maria Rivera-Carvalho

    Hilarious. This has been happening since President Obama took office. 1. Republicans make a mess. 2. Stand firmly defending their "principles". 3. Refuse to consider ANY Democrat proposal. 4. Then somenthing or someone make them understand that they are shooting themselves in the foot. (Students outnumber tea drinkers). 5. Then they turn on the spin machine to try to make people forget their previous stance by loudly defending the Democrat led legislation they have been opposing all the time. 6. Call the media and "demand" that the Democrats do what they had been trying to do all along. 7. Republicans lose because of their transparent opportunism. 8. Act surprised. 9. Blame Hillary Clinton 10. Repeat.

    July 6, 2013 10:37 am at 10:37 am |
  15. craig

    The only reason the GOP cares at all is that they're getting blow back from their intransigence. Now they're beginning to see some "cost" of continually blocking action in Congress, and they fear that younger voters...those with loans...will remember. HINT: They will!

    July 6, 2013 10:39 am at 10:39 am |
  16. Renee Marie Jones

    Republicans and "action" in the same sentence? What a hoot! Republicans only want the country depressed and the economy stagnant. They only "action" they want is to wreck the economy, because they think that will give them more power. They said as much.

    July 6, 2013 10:40 am at 10:40 am |
  17. IndFL

    How about NO interest ever. These kids are our FUTURE.

    July 6, 2013 10:41 am at 10:41 am |
  18. jamie

    Billions of our hard earned tax dollars are taken out of our hard earned monthly wages. The billions go to other countries to "BUY" them but yet they will not divert any of the Billions back to the USA to help their own. No wonder the USA has problems

    July 6, 2013 10:43 am at 10:43 am |
  19. dean morse

    The GOP stays the course. Create an issue, and then blame the Democratic Party for the GOPs inaction. The GOP are masters of illusion when it comes to politics in Washington. They continue to lie and mislead the voters. I often wonder how they sleep at night.

    July 6, 2013 10:46 am at 10:46 am |
  20. Mark Ayres

    Student Loan rates should not be set by the private sector. The education of our students represents a huge investment for society with a payback time that is too long for private sector economic forces to optimize properly. Their only response to date has been to gauge students and optimize their own short term profits. Set them by the government to reflect the true long-term return that this investment represents.

    July 6, 2013 10:52 am at 10:52 am |
  21. disguyhere

    thats rich coming from the people who have effectively stalled any legislation that would have fixed th issue..

    the gop no longer has the right to demand action on anything. They are obstructionist government at it's worst

    July 6, 2013 10:55 am at 10:55 am |
  22. rl

    Jenkins wants action now that she has found out even in repub/TB Kansas the students will hold it against the gop. There is no one else to blame but the Democrats. She can't put the blame on herself.

    July 6, 2013 10:56 am at 10:56 am |
  23. Loki

    m understanding of this is that the most this would cost any one is $4,500 over 10 years–this is abou $1.25 per day–real end of the wold stuff

    July 6, 2013 11:00 am at 11:00 am |
  24. billfit

    The Democrats keep taking and taking. They want everyone but their leaders to be uneducated and broke, so that they can give them handouts and control them like sheep. All they want to do is enrich themselves. Pathetic!

    July 6, 2013 11:03 am at 11:03 am |
  25. justin

    What about all of us the graduated five years ago with 6.4% rates. We need to lower existing loan rates. That is the stimulus.

    July 6, 2013 11:13 am at 11:13 am |
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