Senators: Student loan interest rates to double

Published on NewsOK Modified: June 27, 2013 at 3:26 pm •  Published: June 27, 2013
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Republicans also noted the Manchin-led proposal had many similarities with Obama's, including a link between 10-year Treasury notes and student rates.

"This agreement is very much like the proposal in the president's budget, it is very much like the proposal passed by the Republican House of Representatives and it will save billions of dollars in interest for all 11 million students taking out loans this year by dropping rates on all student loans," said Tennessee Sen. Lamar Alexander, the top Republican on the Senate Health, Education, Labor and Pensions Committee.

Alexander, a former education secretary, called Harkin's proposal "a short-term, political fix."

"That's no fix at all when we have a plan to help all students that we can pass quickly," he added.

Nothing was happening — quickly or not — before July 1, meaning students who take loans would face higher rates. Senators were heading out of town without a deal, and Harkin said his colleagues would consider a retroactive fix on July 10.

"I think we are nowhere between now and July 1," said Rep. George Miller of California, the top Democrat on the House Education and the Workforce Committee. "It sounds to me like the Senate is going to leave town without dealing with this."

But Democrats promised to turn back to them when they get back to Washington, first with a short-term fix and then a longer-range measure.

The law that governs college and universities expires this fall and lawmakers planned to rewrite it starting in September. Democrats said they prefer to include a comprehensive student loan measure in it, rather than as a stand-alone bill.

"We need a one-year patch to keep interest rates from doubling on student loans," said Sen. Elizabeth Warren, D-Mass. "That buys us the time."

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