House Committee on Education and the Workforce Chairman John Kline (R-MN) issued the following statement after the Senate amended and approved House-passed legislation to tie student loan interest rates to the market:
For more than a year Republicans have been fighting for a long-term solution to the student loan interest rate problem, and I am pleased we finally have a Senate agreement worthy of public support. The legislation approved today reflects the policies and priorities of the House-passed Smarter Solutions for Students Act. This is a victory for students and taxpayers, and I look forward to the bill’s swift passage in the House.
As amended by the Senate, the Smarter Solutions for Students Act (renamed the Bipartisan Student Loan Certainty Act of 2013) 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.