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. Frank

    Shouldn't reader comments be screened for truth? Reocnmarine above spouts a couple of blatant lies in a comment, claiming that the GOP has sent 81 jobs bills from the House to the Senate over the last five years, which is a complete and utter fabrication, the House has taken absolutely no action on any jobs bill since Obama has been in office. They have, however, taken the time to vote to repeal Obamacare at least 37 times, which is a total waste of time and effort on their part, at least as long as Obama is president. Secondly, the claim is made that amnesty was passed in two weeks. I don't know where this person is getting information, must be from Fox News, because there has been no action taken on an immigration bill in either the House or the Senate, so how was amnesty passed????? The problem is there will be some people who will read these comments and believe them, which is the truly saddest part of it, that there are people out there willing to lie about what's going on in Congress, as if the truth isn't bad enough, and for what purpose, just to make things worse?

    July 6, 2013 01:19 pm at 1:19 pm |
  2. Dorothy

    Democrats fault? The House is Republican and the Senate has enough Republicans to block anything, because of the stupid filibuster rules. People are watching, Lynn. They see what is really happening.

    July 6, 2013 01:24 pm at 1:24 pm |
  3. John

    What 'issue' needs to be resolved? These people want to borrow money to get a college degree because they figure that it will MORE than pay for itself. Fine. Getting them subsidized rates for this INVESTMENT is like providing subsidized rates for speculators. If a college degree is worth as much as all the 'experts' say it is, why are they having so much trouble paying single digit interest rates that only come due AFTER they graduate?

    July 6, 2013 01:25 pm at 1:25 pm |
  4. Uh-Clem

    I have absolutely no problem setting the rates to what the banks get when they borrow from the Fed. No one should get rich on education loans.

    July 6, 2013 01:25 pm at 1:25 pm |
  5. bcolebennett

    Michigan-Joe never took macroeconomics classes.

    July 6, 2013 01:26 pm at 1:26 pm |
  6. Matt

    Hey, treat us like corporations, give us money, extremely low interest. No penalize the hell out of us, show that you are owned totally by corporations. Its a top down economy, no investment in the people just the top 1% as always. Never going to change/

    July 6, 2013 01:27 pm at 1:27 pm |
  7. billfit

    So many bloo dthirsty ki llers on this board. We need to get you all some we apons and ship you to Afghanistan. As cold bl ooded as you all are, the Taliban would be gone in a week.

    July 6, 2013 01:30 pm at 1:30 pm |
  8. Hawk in Texas

    It seems that nowdays the favorite pastime of republicans is lie, lie, lie.

    July 6, 2013 01:31 pm at 1:31 pm |
  9. Dorothy

    She forgot to mention that in the state that she represents, a bright red state, they have gutted the funding to the once great state universities, who know have to raise their tuition higher and higher. And the state Tea Party have eliminated taxes for "small" businesses which somehow includes the Kochs, and raised the sales tax. Cities and counties are now looking at raising property and sales taxes, so they can continue K12 schools. The poor and middle class are paying to help the rich pay no taxes. Supposedly the rich are going to create lots of new jobs for Kansas. Of course, they won't be jobs with living wages. Crickets are still chirping on any new jobs. Well maybe maid, chauffeur or nanny to the rich.

    July 6, 2013 01:31 pm at 1:31 pm |
  10. underwaterops

    Unfortunately, giving ever larger loans to students to pay for ever increasing tuition doesn't address the real problem.
    University pay to the upper management (presidents, board members) has done the same thing as at US companies – skyrocketed beyond any reasonable level, and way ahead of average pay or inflation. Way, way ahead.
    And then there are the marbled halls, the huge buildings, the cobbled walkways. And the huge subsidies to sports (which doesn't pay it's own way at any university but the top six in the league, when you ignore the misdirected donations.)
    Get the cost of education under control. Slash the salaries of the board and the executives. Demand the new buildings and improvements are cost effective. Pare back or drop expensive league participation. Return universities to being educationally oriented.

    July 6, 2013 01:35 pm at 1:35 pm |
  11. stevetall

    What a bunch of bull. The Republicans House has never compromised with the president or the Senate, so how can they try to pin the blame on the Democrats now? More obfuscation and more of the same lack of cooperation. "Oh, look! A bunny!" It's all slight of hand and lying from the Right.

    July 6, 2013 01:36 pm at 1:36 pm |
  12. bigbendjc

    If the interest rates were abortion the GOP would be RIGHT on it. Maybe we should relabel JOBS as ABORTION so the GOP can keep their 2010 promise, "JOBS, JOBS, JOBS"

    July 6, 2013 01:38 pm at 1:38 pm |
  13. Captain Obvious

    Students should be allowed to borrow money at the same rate as banks. Which is currently under 1%.

    July 6, 2013 01:39 pm at 1:39 pm |
  14. RandyF

    Student loans should be at the same rate the government charges banks what's that .25%. At least students are trying to do something other than steal from the American public.

    July 6, 2013 01:40 pm at 1:40 pm |
  15. Seyedibar

    Paying for college is not difficult. It just takes a willingness to work hard, as it should. I worked three jobs while attending school full time and mostly paid off my loans as I took them out. I'm grateful to the bank and university that loaned me money I did not have, and i purposefully sought out the most accredited, least expensive schools. Even with a interest hike, it would have made little difference to me.
    If modern students are having trouble paying loans in a timely manner, it may have more to do with wasted time switching majors, an unwillingess to simultaneously balance work with school, or the fact that most pell grants pay out at the start of each semester leaving many students to squander their extra money on concerts, tattoos, and fashionwear.

    July 6, 2013 01:41 pm at 1:41 pm |
  16. rs

    Jenkins is at least partly right- however HER PARTY, at the state level has been cutting funding to state schools, which in turn drives up tuitions and college costs- The GOP is simply in the pocket of the school loan lenders who benefit from this situation. Nothing will change until the GOP gets voted out.

    July 6, 2013 01:43 pm at 1:43 pm |
  17. rs

    Really, govern on the basis of bloggers ?
    Well, yeah, it is sort of a mini public opinion poll (oh yeah, you guys don't believe in those). Seriously- the GOP is so isolated and delusional, any input would help them. But hey, they're on fire and goin' down. Why not enjoy the crash!

    July 6, 2013 01:46 pm at 1:46 pm |
  18. Big_D

    The GOP are certainly not too big on the truth. They have been holding up the legislation so they can guarantee a profit for bankers. I'm sure they will blame Obama somehow after he stated months ago he wanted students to get the same rates as banks.

    July 6, 2013 01:49 pm at 1:49 pm |
  19. ALLuh

    The GOP doesn't want to help a single middle class American, do not believe this BS

    July 6, 2013 01:51 pm at 1:51 pm |
  20. Loathstheright

    Typical Republican, accuse the other of what they, the Republicans are guilty of.

    July 6, 2013 01:53 pm at 1:53 pm |
  21. dan

    seems that the GOP couldn't tell the truth if their very lives depended on it.

    July 6, 2013 01:55 pm at 1:55 pm |
  22. SteveinMN

    Ummm...."Two legs good" come to mind???

    The GOP - G-estapo O-rwellian P-arty.

    July 6, 2013 01:58 pm at 1:58 pm |
  23. ken

    there needs to be a law that allows us to declare bankruptcy when it becomes obviosuly clear we cannot pay back the loans. with this economic downturn there are lots of people defaulting or deferring. My loans have been deferred for nearly a decade as I have been unable to secure a job to pay them back. I am over qualified for Mc jobs and being black and educated doesnt work to my advantage. so there is now way i am EVER gonna be able to pay back the 90k i borrowed between the two schools and the interest which at this point has upped my total to about 140k. i will never buy a house let alone be able to pay back the loan.

    July 6, 2013 01:59 pm at 1:59 pm |
  24. Henry

    Republicans know that their two fold attack against higher education will insure that only the wealthy can afford an education,thus creating a new aristocracy. Tuition at colleges and universities has increased at a rate far higher than the general inflation rate. This has been caused by Republicans cutting back on Federal and State support of higher education, which causes costs to be passed on in the form of higher tuition. Also by making Federal student loans more expensive, even more people can't afford higher education. The message from the Republicans is that it is ok for Bill Gates' children to go to college, but keep the poor and middle class out!

    July 6, 2013 02:01 pm at 2:01 pm |
  25. edpeters101

    Jenkins need a slap-up-aside the head!

    July 6, 2013 02:02 pm at 2:02 pm |
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