ICYMI: What They Are Saying: The “Smarter Solutions for Students Act”

May 20, 2013 Issues: Education

Washington, D.C. – Absent congressional action, on July 1, 2013, interest rates for federally subsidized student loans will jump from 3.4 percent to 6.8 percent.  Later this week, the U.S. House will consider legislation, H.R. 1911, the Smarter Solutions for Students Act, to prevent the rate hike and move student loans to a more predictable and affordable market-based rate system.  H.R. 1911, which is based on a similar proposal put forth by the President in his fiscal year 2014 budget request, passed the House Education Committee on May 16, 2013.  

What They Are Saying: the Smarter Solutions for Students Act:

  • Inside Higher Education (5/10/2013): New Ideas on Interest Rates:  “Right now, interest rates on federal student loans are set by Congress as part of legislation passed in 2007. If Congress doesn’t act by July 1, the interest rate for subsidized Stafford loans -- which don’t accumulate interest while students are enrolled in college -- will increase from 3.4 percent to 6.8 percent…This year, both the Obama administration and House Republicans are pushing for a long-term solution based on interest rates in the broader economy…”
  • The Hill (5/11/2013): House borrows from Obama for legislation to fix student loan rates: “House Republicans proposed a permanent fix for avoiding a doubling of student loan interest rates this year, one that is based on a proposal from the Obama administration. The Smarter Solutions for Students Act, H.R. 1911, would require interest rates for all federal student loans to be based on the 10-year Treasury note, and end what has become an annual debate within Congress on how to set the rates…”
  • Chronicle on Higher Education (5/17/2013): House Panel Approves New Approach to Student-Loan Interest Rates:  “The White House and most Republicans are pushing a permanent fix, with interest rates tied to federal borrowing costs…On Thursday the House education committee passed a bill, HR 1911, that would switch to a market-based formula for setting rates, similar to the president's budget proposal for 2014…”
  • Minnesota Public Radio (5/19/2013): House to vote student loan bill:  “The bill would get the government out of choosing an interest rate…and would also set a cap on interest rates and allow borrowers to lock in low rates if they choose. President Barack Obama has endorsed a version of this idea…”
  • Associated Press (5/16/2013): House committee OKs student loan bill, links rates to financial markets:  “President Barack Obama's budget outline included flexible rates for student loans, pegging the interest to markets, but did not have a cap. Republicans had long pushed for the flexible rates and Kline said he would go along with Obama on that principle while adding a cap that Democrats sought…”
  • National Journal (5/16/2013): House Panel Moves Plan on Student-Loan Interest Rates:  “It was the cap that got Rep. Jared Polis, D-Colo., to vote for the legislation…Polis also broke party ranks by voting against an amendment by Rep. John Tierney, D-Mass., that would have tied the federal student-loan interest rate to the rate charged by Federal Reserve banks. His amendment failed, with Polis saying the two issues were like “apples and oranges” and had “no economic connection.” ..."

Click here to learn more about H.R. 1911.

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