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

    The action on student loan is MUCH MORE IMPORTANT than the immigration, abortion and what not! This affects our children. However most people are too stupid to be side tracked by things that either don't matter or, can wait.

    July 7, 2013 10:22 pm at 10:22 pm |
  2. JDL

    GOP blames Senate Democrats for everything !

    July 7, 2013 10:26 pm at 10:26 pm |
  3. caa3011

    I blame both kindergarten classes we need to clean house and get rid of these bought and paid for Ds & Rs.

    July 7, 2013 10:28 pm at 10:28 pm |
  4. will

    The government should never have got into guaranteed student loans in the first place. Before that tuition was affordable. Everytime the amount of funds for government loans goes up guess what? So does the tuition rates that have increased so damn much during a relatively short amount of time. Libertarian party you all should check it out

    July 7, 2013 10:29 pm at 10:29 pm |
  5. Duke

    It's the same plan pres wanted.

    July 7, 2013 10:44 pm at 10:44 pm |
  6. Fred Flintstone

    Wow, how funny how the libs are here bashing the Repubs. when they don't even know the facts? Facts scare libs they don't know how to deal with them?

    July 7, 2013 10:48 pm at 10:48 pm |
  7. Sean

    Can't wait for November 2014 so hopefully we can get rid of the extremist right and replace them with more moderate officials. Maybe we could actually get something done?

    July 7, 2013 10:49 pm at 10:49 pm |
  8. Dick Smegma

    More from the Messiah to pay for Obummercare

    July 7, 2013 11:36 pm at 11:36 pm |
  9. SOS

    There are more republicans on welfare than democrats. So these nuts need to pipe down.

    July 7, 2013 11:53 pm at 11:53 pm |
  10. chuck

    Got my degree/loans in education and administration. My daughter now is in college and dealing with loans. Perhaps I should have gotten my degrees and loans for something more lucritive. Like being a congressman. Its not as honorable, but pays so much better.

    July 8, 2013 12:16 am at 12:16 am |
  11. Shelbyann

    Republicans will blame Obama because they can't legislate. Maybe we can get them some training.

    July 8, 2013 12:55 am at 12:55 am |
  12. Yon

    I think we can safely blame both parties for destroying the republic and also those that wanted an easy life off the hard work of others. Everything else is a smoke screen.

    July 8, 2013 04:00 am at 4:00 am |
  13. Amy

    Wow, I really had to dig to find out who was trying to help the students. Do you usually bury the main point of an article near the end under such a misleading title? Really made me work for it.

    July 8, 2013 05:20 am at 5:20 am |
  14. Magilla Gorilla

    Magilla hopes student loan interest rates go back down... hopefully bananas not affected too.

    July 8, 2013 06:19 am at 6:19 am |
  15. opinion8it

    How can Republicans vote no on the bill and blame Democrats for it?

    July 8, 2013 07:14 am at 7:14 am |
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