Skip Ribbon Commands
Skip to main content

 Email  Share  Print

ACE, Other Higher Education Associations Express Support for Senate Student Loan Bill

July 23, 2013

Capitol Dome

Groups note concerns about potential future interest rate increases and higher graduate rates

​ACE sent a letter yesterday signed by a number of other higher education associations asking senators to vote for the Bipartisan Student Loan Certainty Act of 2013 (S. 1334), which is slated to receive a Senate floor vote as early as today.

The agreement reached by Senate negotiators last week encompasses all student loans but was prompted by the doubling of rates on subsidized Stafford loans to 6.8 percent July 1. A previous compromise plan was abandoned due to a $22 billion cost estimate.

“We realize this has been a complicated effort, and we are pleased the Senate has reached a bipartisan agreement on this vital issue,” the letter states.

However, the letter also expresses concern that the bill uses a market-based interest rate that means the cost of borrowing could still rise significantly, noting that, “If this happens, we would urge Congress to revisit this issue and take appropriate action.”

The letter notes that the bill requires, for the first time, graduate and professional students to pay a higher interest rate than undergraduates.

“This exacerbates a troubling pattern of increasing the costs of education for students pursuing the advanced degrees our economy needs,” the letter states. “We appreciate your efforts to address student loan interest rates as quickly as possible, but we ask that you restore the equal treatment of graduate student loans at the earliest opportunity.”

Under the bill, interest rates on both subsidized and unsubsidized undergraduate Stafford loans would be tied to the 10-year Treasury rate with an add-on of 2.05 percent. Rates on these loans would be set at the time the loan is taken out, fixed for the duration of the loan, and capped at 8.25 percent to guard against future increases in market rates.

The plan takes a similar approach to Stafford loans for graduate students, which would have a 3.6 percent add-on and a cap of 9.5 percent, and PLUS loans, which would have a 4.6 percent add-on and a 10.5 percent cap. The bill would generate $715 million in savings, which would be used for deficit reduction.

ACE President Molly Corbett Broad last week issued a statement of support for the bill that urged the Senate to pass it swiftly.

Other ACE News

  • Institutional Capacity

    June 29, 2015

    Apply Now for ACE’s Institute for New Presidents

    New college and university leaders from all sectors of higher education can apply now for the 2015-16 ACE Institute for New Presidents, which is designed specifically for presidents in their first three years of service.

  • Supporting Student Veterans

    June 29, 2015

    Bob Woodruff Foundation Grant Extends Program to Train College Mental Health Counselors

    A grant from the Bob Woodruff Foundation will allow ACE to extend an initiative that trains college and university mental health counselors on how to better address issues such as post-traumatic stress and suicide prevention in their work treating...

  • June 29, 2015

    Today's Headlines

    HEADLINES: Today's Top Higher Education News

    In this morning’s headlines, the U.S. Supreme Court has again agreed to hear a legal challenge to the race-conscious admissions policy at the University of Texas at Austin, first decided by the court in 2013. In other news, The Chronicle of Higher...

  • June 26, 2015

    Education Department Scales Back Plan to Rate Colleges

    The Department of Education (ED) announced yesterday that it has scaled back the planned Postsecondary Institution Ratings System (PIRS) first announced by President Obama in August 2013.

  • Budget and Appropriations

    June 26, 2015

    Congress Moves Forward on Education Funding

    The House and Senate appropriations committees both passed their FY 2016 Labor, Health and Human Services, and Education bills this week, and the results were somewhat mixed for higher education.


 Related Content