Skip Ribbon Commands
Skip to main content

 Email  Share  Print

FRIDAY BUZZ: Student Loan Interest Rate Proposals Emerge From Congress

May 10, 2013

Capitol Dome

 

​A range of legislative choices to revamp the federal student loan system emerged in Congress this week, as the interest rate on subsidized student loans is poised to double from 3.4 percent to 6.8 percent July 1. 

The most recent proposal was introduced yesterday when Reps. John Kline (R-MN) and Virginia Foxx (R-NC) of the House Education and Workforce Committee introduced the Smarter Solutions for Students Act (H.R. 1911). This bill would tie both subsidized and unsubsidized Stafford student loan rates to the 10-year Treasury note, plus 2.5 percent, and end the rate differentiation between the two types of loans. 

Additionally, it would calculate Parent and GRAD PLUS loans at the 10-year Treasury note, plus 4.5 percent. Interest rates would be reset yearly and be capped at 8.5 percent for Stafford Loans and at 10.5 percent for PLUS Loans. 

The bill is broadly similar to the plan President Obama proposed in his FY 2014 Budget​; however, the president’s plan would still differentiate between subsidized Stafford, unsubsidized Stafford and PLUS loans, and there would be no cap on the interest rates.  

A range of proposals remain in play in the Senate, including those offered by Sens. Lamar Alexander (R-TN), Richard Burr (R-NC) and Tom Coburn (R-OK); Sen. Jack Reed (D-RI); and Sen. Elizabeth Warren (D-MA).

For more details, see the coverage in this morning’s papers: 

Bills Would Prevent Rise in Student Loan Rates
The New York Times 

Lawmakers Propose Long-Term Solutions for Student-Loan Interest Rates
The Chronicle of Higher Education 

New Ideas on Interest Rates
Inside Higher Ed

Republicans to Back Obama's Student Loan Plan​
The Associated Press 

Other ACE News

  • February 12, 2016

    Today's Headlines

    HEADLINES: Today's Top Higher Education News

    The Washington Post reports that President Obama is nominating John B. King Jr. to officially lead the Department of Education, where he has served as acting secretary since the start of the year. In other news, The Chronicle of Higher Education...

  • Articulating Global Strategy

    February 12, 2016

    Coworkers

    13th Cohort of Internationalization Laboratory Shares Steps Forward

    ​Members of the 13th Cohort of ACE’s Internationalization Laboratory joined in a robust discussion last Monday in Washington during its mid-year seminar. The participants, who represent 13 institutions of various types and sizes, are midway through...

  • Innovative Practices

    February 12, 2016

    graduates

    Register Now for ACE Convening on Alternative Education

    ​Two white papers examining how alternative educational approaches can better meet the needs of students and employers will be unveiled at a Feb. 25 convening at ACE’s offices in Washington, DC.

  • Leading Internationalization

    February 12, 2016

    Students walking around campus

    Survey to Map Internationalization on U.S. Campuses Launches

    ​CIGE launched the fourth edition of its Mapping Internationalization on U.S. Campuses survey to assess the current state of internationalization at American colleges and universities, analyze progress and trends over time and identify future...

  • Supporting Military-Connected Students

    February 10, 2016

    Student in the military

    ACE to Host Second Academic Advising Summit for Service Members and Veterans

    ACE’s second Service Member and Veteran Academic Advising Summit, to be held April 14-15 in Arlington, VA, will discuss mobilizing a national campaign to expand partnerships between educators, employers and other key stakeholders aimed at aiding in...

 

 Related Content