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. Steveo

    Are you kidding me. Come on the whole country knows all the GOP can do is say no and lie.
    You have a point because the GOP said Kerry was not on his yacht and then on the next day said he was. GOP Clapper apologized for lying to Congress when he loudly proclaimed he told the truth. Yep! Those lying GOP!!

    July 6, 2013 11:53 am at 11:53 am |
  2. Tony in Maine

    Amazing – 1984 Newspeak will soon become the language of America. Up is down. Black is white. The GOP is for middle class and poor students. The Democrats only help rich students who don't need to borrow money. McConnell loves have President Obama in the WH. Boehner isn't petrified of the eyeball spinners on the far right. Yadayadayada

    July 6, 2013 11:54 am at 11:54 am |
  3. Hogarth

    What the Democrats are asking for is a little protection for students and their families from a rate spike – something that might potentially harm the banks' profits, who are apparently more important to Republicans than the people who elected them.

    July 6, 2013 11:54 am at 11:54 am |
  4. gary

    Do the other Republicans know about this?

    July 6, 2013 11:54 am at 11:54 am |
  5. Mike

    If they have an (R) next to their name they are not getting my vote. These clowns have sat on their hind ends and done nothing to help the average working class family in this country.

    July 6, 2013 11:55 am at 11:55 am |
  6. CA Liberal

    Easy to see how well market based rates worked out. Students are $1 trillion in debt now.

    July 6, 2013 11:57 am at 11:57 am |
  7. Edwin

    I think the most telling thing is that House republicans waited until AFTER the deadline to complain. They didn't actually care about this until millions of voters called them up to yell at them.

    This idea that it is the Senate's fact is ludicrous – I have been following this story for over a year, and the Senate has been trying to iron out a compromise with the House all that time... but the GOP controlled House thinks compromise is a dirty word. The Great Obstructionist Party feels the only time to work WITH the other party is after things have fallen apart – otherwise they get complaints from their base that they were soft.

    July 6, 2013 11:59 am at 11:59 am |
  8. rosethornne

    Why are they trying to make a profit on these loans?
    That's just shortsighted.

    July 6, 2013 12:03 pm at 12:03 pm |
  9. nleegray

    How about forgetting the holiday/vacation mindset Congress (as a whole) and focusing on serving the people who elected you! Oh....I forgot......big corporations, the mega-rich and special interests who gave you money to fund your campaign is where you place your priorities.

    July 6, 2013 12:05 pm at 12:05 pm |
  10. Drew

    Perhaps if college was reasonably priced, this would be a non-issue. The price of education is high in large part because of the loans. But if you want to 'leave it up to the free market', fine. If people can no longer get affordable loans, they'll stop going to college, and the schools will have to get cheaper. Also, employers will have to stop asking for degrees on jobs that don't really require one.

    July 6, 2013 12:05 pm at 12:05 pm |
  11. Rosslaw

    What's the big surprise. In 2007 Nancy Pelosi's first legislative initiative was to greatlyincrease the benefits provided veterans under the GI Bill. Guess which party opposed the increase in benefits to veterans on a straight party line basis.. Go ahead. Guess. Hint: they're the ones who wear flag lapels to sleep to prove how patriotic they are.

    July 6, 2013 12:05 pm at 12:05 pm |
  12. sparky

    you want action? WELL TAKE ACTION!!!!!!

    oxygen thieves!

    July 6, 2013 12:09 pm at 12:09 pm |
  13. honestmidwest

    Wow..."the GOP concerned about education/students"...sorry, but I imagine only the absolute dumbest will believe/buy into that one. Most everyone knows it is a political ploy so they can "appear" concerned, and for those that don't get that....there really isn't any helping you.

    July 6, 2013 12:11 pm at 12:11 pm |
  14. g

    republicans destroying america since 1980

    July 6, 2013 12:15 pm at 12:15 pm |
  15. andrew skeens

    People wake up! Over 30 years ago there wasn't a federal pell grant for the people thats under poverty thank goodness there is now but for those who make more than 25k a year quit complaining about loans. All of our families before us worked off there butts to pay for their loans. I believe we should go back to not having handouts the reason why is its teaches us to take responsabilty finacially and work hard for what we want to do in our lives. Besides if we want to get this econamy back on schedule we need to get our government to quit spending soo much. Look up the facts our current president has spent more money and executive orders than any other president of our country. And i do agree we need to stop giving money to other countries and take care of ourselves first.

    July 6, 2013 12:17 pm at 12:17 pm |
  16. neastsider

    What a bunch of bagger republican a–holes ! They dragged their feet on passing legislation to keep the rate at 3.4%, instead they want to tie the student loan rate to a floating rate index which no one can predict with any accuracy which way the index will go. Then they claim that the Democrats are stalling. This is total hypocracy in action by the bagger repugs.

    July 6, 2013 12:17 pm at 12:17 pm |
  17. John/kc

    What a hypocrite Lynn Jenkins is. I live in Kansas, and she is one of the republicans that refused to keep the interest rate for college low, but now she acts like it is the democrats fault. These republicans have got to have the shortest memories on record of their actions. Vote the republicans out, and Lynn Jenkins, Miss TEA PARTY should be the first one to go!

    July 6, 2013 12:17 pm at 12:17 pm |
  18. Matt

    Is this woman joking? Last year the GOP tried to do everything it could to let student loan rates rise. What a d-bag republican.

    July 6, 2013 12:18 pm at 12:18 pm |
  19. Jason

    This is hillariousssssssss the neocons blaming the democrats for their own tea baggery

    July 6, 2013 12:19 pm at 12:19 pm |
  20. BeverlyNC

    Wait – it has been the Republicans who have BLOCKED the student loan rate bill to keep the rates low and suddenly they are the ones "demanding" it be fixed? They are unbelievable liars and hypocrites. The Democrats have been working for months to get the student loan issue resolved and done and at the very last second (literally), Republicans think about how they will lose all the student votes and decide to do something – not because it is right – but only because they want votes. More reason to throw them all out in 2014. They do NOT work for We the People.

    July 6, 2013 12:20 pm at 12:20 pm |
  21. Bootsie Randolph

    Let's see, one plan is looking after the best interest of the students - the other protects the best interests of the banks, You republicans never change. And now, you've corrupted our president. Am I correct that this is government money the banks have been given (at a very low rate of fixed interest)? We aren't protecting the banks from inflation, Looks like they are positioning themselves for a big inflationary windfall.

    July 6, 2013 12:22 pm at 12:22 pm |
  22. PushingBack

    The GOP is in major denial about where the blockage is located.

    July 6, 2013 12:29 pm at 12:29 pm |
  23. Angry Taxpayer

    Interest rates need to be a MARKET VALUE. no less than what the market will bear. Colleges that offer worthless degrees need to lose enrollment because do one should take a loan for a degree that will not return the value needed to pay off the debt. And in all fairness, not everyone needs to go to college. The world needs manual labor too.

    July 6, 2013 12:30 pm at 12:30 pm |
  24. sparky

    Sen. Elizabeth Warren from Massachusetts has it right: The banks enjoy 0.75% interest rates right now, but want to charge students 6.8% interest?

    The banks are dependent on the government. Period. They got bailed out, and they've been getting nice borrowing terms since then.

    Therefore, it is entirely within the government's right to peg the profits of the banks. Say, 1% over their own borrowing rate. If they don't like it, let them borrow directly from the Chinese, Russians, or Saudis.

    However, that'll never happen, because most senators and congressmen are bought and paid for by the banking industry. They don't care how this affects the people who were duped into voting for them.

    July 6, 2013 12:31 pm at 12:31 pm |
  25. Al

    If a student gets educated and goes out and gets a job, that will make that human a good person. That is what it's all about, and they should not have to pay through the ears to pay back the loan they agreed to. But getting one to go to school and learn something, defeats the belief of this White House Administration that want's people to depend on government handouts.

    July 6, 2013 12:31 pm at 12:31 pm |
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