Skip Ribbon Commands
Skip to main content

 Email  Share  Print

Student Loan Bill Moves Forward in House

May 20, 2013

Washington DC

Senators Introduce Legislation to Address Upcoming Interest Rate Hike

Action heated up in the House and Senate last week on the looming interest rate increase for subsidized student loans, which is slated to double from 3.4 percent to 6.8 percent July 1, with a key House committee approving legislation addressing the issue and a group of senators introducing their own interest rate bill.

The House Education and the Workforce Committee on Thursday approved the Smarter Solutions for Students Act (H.R. 1911). Introduced by John Kline (R-MN) and Virginia Foxx (R-NC), 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.

It would also tie PLUS loans for parents and graduate students to the 10-year Treasury note, plus 4.5 percent. (See the table below for what students and their families would pay under these proposals.)


​Current Rates
​Rates on July 1 (if no action taken)
​The Smarter Solutions for Student Act (H.R. 1911)
​Subsidized Stafford Loans
​3.4% ​6.8% ​4.44%
​Unsubsidized Stafford Loans ​6.8% ​6.8% ​4.44%
​PLUS Loans ​7.9% ​7.9% ​6.44%

Note: Interest rate on H.R. 1911 calculated using the 10-year Treasury note rate as of May 15, 2013

ACE and 14 other higher education associations on Wednesday sent a letter and statement of key principles to the committee responding to the House measure.

On Friday, ACE and 12 other higher education associations sent a letter and the statement of principles responding to a Senate student interest rate bill, the Student Loan Affordability Act of 2013 (S. 953). That measure was introduced last week by Tom Harkin (D-IA), chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Jack Reed (D-RI), Patty Murray (D-WA) and Majority Leader Harry Reid (D-NV).

The Student Loan Affordability Act would freeze student loan interest rates for two years while Congress works on a long-term solution. It pays for this extension with a combination of changes to tax and energy provisions that would not affect students or institutions. It is one of a number of bills that have been proposed in the Senate to address the pending interest rate deadline.

Because the House and Senate approaches are so different, work on a final version both chambers can agree to seems likely to continue right up until the July 1 deadline.

Other ACE News

  • March 3, 2015

    HEADLINES: Today's Top Higher Education News

    In today’s headlines, The New York Times op-ed page looks at the debate over how to ensure high quality teacher education programs. In other news, The Chronicle of Higher Education writes about how the University of Pennsylvania is examining its...

  • ACE Annual Meeting 2015

    March 2, 2015

    ACE Annual Meeting to Feature Federal Relations Updates

    ​ACE's 97th Annual Meeting will provide valuable opportunities to obtain insight into what higher education leaders can expect from federal policymakers in the coming year.

  • Campus Internationalization

    March 2, 2015

    12th Cohort of Internationalization Laboratory Shares Steps Forward

    ​Members of the 12th Cohort of ACE’s Internationalization Laboratory joined in a robust discussion Friday, Feb. 13 in Washington during the mid-year seminar to explore several campus internationalization issues, with creating campus-wide buy in and...

  • Institutional Capacity

    March 2, 2015

    ACE Institute for New Chief Academic Officers Is Accepting Applications

    ACE is now accepting applications to its 2015 Institute for New Chief Academic Officers, which will meet in three sessions throughout the year.

  • Tax Policy

    March 2, 2015

    ACE, Higher Education Groups Support Schumer Tax Credit Bill

    ACE and 11 other higher education associations sent a letter Feb. 27 to Sen. Charles Schumer (D-NY) in support of his recently introduced bill to make a number of important reforms to the American Opportunity Tax Credit and Lifetime Learning Credit.

 

 Related Content