Republicans demand action on student loan interest rates
July 6th, 2013
06:00 AM ET
10 months 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. LH

    So it's the Senate democrats who refuse to work with "us"...the GOP on this issue. But it's not the republicans who refuse to work with the Senate democrats? My mother had it right...when you have nothing to say, say nothing.

    July 6, 2013 11:13 am at 11:13 am |
  2. Just another Democrat

    Hey Republicans – psst – over here – are you reading any of this? Do you understand what all these bloggers are saying? They are saying they are fed up with your inaction that you disguise as action. They are saying that even if you're their brother they won't vote for you. I think you need to clean up your act if we're going to continue to be a two-party system in the future....the writings on the wall.

    July 6, 2013 11:15 am at 11:15 am |
  3. Michigan_Joe

    If it doesn't enrich the already rich, the GOP won't hear of it. The GOP is the "shame of our country" and every one of them should be replaced with those that want our country to prosper for EVERYONE, not just the rich.

    July 6, 2013 11:17 am at 11:17 am |
  4. racknstack

    Another reason why America sucks. At least education in about every other first country world has some degree of subsidy from its peoples' government. Not us!!

    July 6, 2013 11:19 am at 11:19 am |
  5. TKO

    Cliffs and deadlines? Reallly? The GOP has been the master of cliffs and deadlines for the past five years, and now they complain about it? On the other hand, it is very clever for the GOP to appear to take the higher road on student loans, luring those gullible young voters (who, I know from exeprience, are't that gullible at all) to their party.

    July 6, 2013 11:19 am at 11:19 am |
  6. Seattle Sue

    Rep. Jenkins puts out the same crap as the rest of the Republican/Tea Party. Something in their genes prevent them from telling the truth.

    July 6, 2013 11:21 am at 11:21 am |
  7. Matt

    Interesting that this time Barack Obama is proposing the version the GOP seems to endorse, but the Democrats continue to accuse only the GOP of the stalemate. Gotta pretend their "wonderful" president has no faults, huh?

    July 6, 2013 11:23 am at 11:23 am |
  8. DFW Dann

    I agree the program should be revenue neutral. The interest charged should be to cover the costs of administration of the program and an increase in the number of loans (just in case we fix our public education system). This should be a self-sustaining program that doesn't require an annual contribution from the government. It also should not be a revenue generator for the government. They'll get their revenue in the increased tax base from the graduates who move into a higher tax bracket.

    July 6, 2013 11:23 am at 11:23 am |
  9. billfit

    Shameful Democrats. They want to make it as difficult as possible for anyone to reach the middle class. Their motto is to keep everyone poor and uneducated, so that the masses will not be intelligent enough to know that they are being conned by the wealthy Democratic elite. So sad that people are so gullible.

    July 6, 2013 11:24 am at 11:24 am |
  10. TrueAmerican56

    I was wondering how dumb you think your voters and the general public is? If you and your fellow Republicans had any ability to look at historical fact, you would see that a loan with adjustable rates over time is not a good thing, didn't work for home mortgages and won't work for student loans. My suggestion for you is, stop being ignorant of history.

    July 6, 2013 11:26 am at 11:26 am |
  11. mikk2781

    Sure, blame it on the democrats, but I just see the whole thing as another imstance where Washington has failed to act. I've been getting emails about this for a year from political action groups, and it just became a big deal after the deadline. Congress sucks.

    July 6, 2013 11:27 am at 11:27 am |
  12. caesarbc

    Since when are Republicans interested in kids in higher education? I thought they home-school everyone so they can avoid a "liberal" education?

    July 6, 2013 11:28 am at 11:28 am |
  13. Herchato

    Is it possible that this congress could be the worst in our history?

    July 6, 2013 11:30 am at 11:30 am |
  14. billfit

    The Democrats and their lies will never cease! It's all about making money for the wealthy Democrats, and in the process denying education for the masses!! I you're not an Ivy League type like they are, they couldn't care less about you. Such blatant self-serving behavior!

    July 6, 2013 11:31 am at 11:31 am |
  15. Bob

    "Hey Republicans – psst – over here – are you reading any of this? Do you understand what all these bloggers are saying? They are saying they are fed up with your inaction that you disguise as action"

    Really, govern on the basis of bloggers ? Repubs did pass a deal in the house to lower rates. Gov took this plan over during the Obamacare debate and set the rates. They then used the profits to show the cost of Obamacare being lower. Do you losers not remember ?

    July 6, 2013 11:32 am at 11:32 am |
  16. kfitton

    You know it's funny that we can get car loans for less than 2% right now but to get an educational loan it's almost 7%. Where are the priorities?? As a country priority, ed loans should be capped at 1% with a 1 year grace period because even people WITH degrees are having a hard time finding work that pays enough to both live on and pay for the loans they took out.

    July 6, 2013 11:37 am at 11:37 am |
  17. reocnmarine

    Democrats don't care about Student Loans. They are more concerned about AMNESTY for Illegals. They have had 81 jobs bills from the HOUSE sent to the the Senate over the last 5 years and won't even bring them up for a vote, yet AMNESTY is passed in 2 weeks.

    July 6, 2013 11:37 am at 11:37 am |
  18. Bob

    Are you kidding me. Come on the whole country knows all the GOP can do is say no and lie.

    July 6, 2013 11:39 am at 11:39 am |
  19. awlgrip2

    Bob

    "Are you kidding me. Come on the whole country knows all the GOP can do is say no and lie."
    ************************************************************************************************************************************
    You could not be further off base...................................

    July 6, 2013 11:42 am at 11:42 am |
  20. Martha in CF

    Sorry Ms Jenkins-all of this is your redumblican parties fault......The American people know this......your party is the party of NO--show us something you can get done........we are sick of the blame game.......

    July 6, 2013 11:44 am at 11:44 am |
  21. Dr Matrrix

    Pretty soon they will claim the majority in the Senate is fillibustering the bill, and all of Rush's listeners will believe it.

    July 6, 2013 11:46 am at 11:46 am |
  22. Bessy

    Some people are so gullible. Do some fact checking and see who is holding things up. How about the GOP and their constant obstruction of anything that will benefit any one other than the rich.

    July 6, 2013 11:47 am at 11:47 am |
  23. Steveo

    @Michigan_Joe
    If it doesn't enrich the already rich, the GOP won't hear of it. The GOP is the "shame of our country" and every one of them should be replaced with those that want our country to prosper for EVERYONE, not just the rich.
    ---------------
    That right? John Kerry is rich (he owns a yacht), the Obamas are rich, the Clintons are rich, Buffet is rich, Gates is rich. I imagine all these GOP folks are eagerly awaiting their cut as well, right? Oh wait! These folks are not GOP! Why do you on the left always slam the1%ers ESPECIALLY sense your party is full of them. Reid and Pelosi and the new Sect of Commerce (she is a billionaire) to name a few more!. It seems to me hypocrisy is running deep. You said ONLY the GOP are looking out for the rich. You might want to take a closer look! The DEMs do the EXACT same thing and that seems to be good with you.

    July 6, 2013 11:49 am at 11:49 am |
  24. Tony

    Your party controls the House of Representatives. Pass a bill that does not include tax cuts for the rich, restrictions on abortions, or repeal of health care law.

    July 6, 2013 11:51 am at 11:51 am |
  25. krehator

    Oh my. GOP and its bogus caring. Many of the students using the loans are probably Dems and definitely part of that 49% they hate.

    July 6, 2013 11:52 am at 11:52 am |
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