ACE sent a letter to the House today on behalf of nine other higher education associations urging House members to support the Bipartisan Student Loan Certainty Act of 2013 (S. 1911), which is scheduled for a vote on the House floor this Wednesday, July 31.
The measure, which the Senate approved on July 24, was negotiated in response to the doubling of federal subsidized student loan interest rates, which rose to 6.8 percent on July 1.
Under the bill, interest rates on subsidized and unsubsidized undergraduate Stafford loans would be tied to the 10-year Treasury note 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. Stafford loans for graduate students would have a 3.6 percent add-on and a cap of 9.5 percent, and parental PLUS loans would have a 4.6 percent add-on and a 10.5 percent cap.
While ACE and many in the higher education community support the legislation, the letter notes that because the bill uses a market-based rate, future interest rate increases could significantly raise the costs of borrowing. If this happens, the groups write that they would urge Congress to revisit the issue.
The groups also asked for a restoration of the equal treatment of graduate student loans at the earliest opportunity.
The White House has issued a Statement of Administration Policy supporting the bill, so it is expected this issue will finally be resolved by the end of the week.