WASHINGTON, D.C. | July 31, 2013
The House of Representatives today approved with bipartisan support a final version of H.R. 1911, the Smarter Solutions for Students Act
(also known as the Bipartisan Student Loan Certainty Act
as amended by the Senate).
“Changing the status quo is never easy, and returning student loan interest rates to the market is a longstanding goal Republicans have been working toward for years,” House Education and the Workforce Chairman John Kline
(R-MN) said. “By getting politicians out of the business of setting student loan interest rates, H.R. 1911 will provide students the certainty they need to make smart, fiscally responsible investments in their education. I applaud my colleagues on the other side of the aisle for finally recognizing this long-term, market-based proposal for what it is: a win for students and taxpayers.”
Subcommittee on Higher Education and Workforce Training Chairwoman Virginia Foxx
(R-NC) stated, “We’ve all seen how Washington’s involvement in rate-setting is a recipe for uncertainty and confusion. Students deserve better. The Bipartisan Student Loan Certainty Act
, much like the House’s Smarter Solutions for Students Act
, ends the temporary fixes that have failed to strengthen our nation’s student loan system and offers long-term simplicity, rate caps, and an assurance that interest rates are immediately in line with the free market. It’s a shame that it took Senate Democrats this long to join us and correct the problem, but it’s better they complete the assignment late than never.”
As passed by the House and Senate, H.R. 1911 will:
- Calculate undergraduate Stafford loans using a formula based on the 10-year Treasury note plus 2.05 percent.
- Calculate graduate Stafford loans using a formula based on the 10-year Treasury note plus 3.6 percent.
- Calculate graduate and parent PLUS loans using a formula based on the 10-year Treasury note plus 4.6 percent.
- Protect borrowers in high interest rate environments by including an 8.25 percent interest rate cap on Stafford loans made to undergraduates, a 9.5 percent cap on Stafford loans made to graduate students, and a 10.5 percent cap on PLUS loans.
- Provide stability for students by locking in interest rates for the life of the loans, and prevent future uncertainty about whether Congress is going to act in time to change the interest rate.
To learn more about H.R. 1911, click here
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