News and updates

Today, the House Education and the Workforce Committee marked up and two measures on to improve college costs and data transparency. The committee modestly amended and approved HR 1911, the Smarter Solutions for Students Act by a vote of 24-13, which ran largely along party lines. The amended HR 1911 would peg interest rates on all federal student loans, except Perkins loans, to the 10-year Treasury note rate plus 2.5 percentage points for undergraduate loans with a cap of 8.5 percent and plus 4.5 percentage points for graduate loans with a cap of 10.5 percent. Interest rates would be calculated and reset yearly.

The committee also marked up and approved HR 1949, the Improving Postsecondary Education Data Act for Students (IPEDS Act). The legislation would create a committee under the Department of Education to conduct a study on the factors students and families want, need, and already consider when choosing a higher education institution. This committee has a year to issue recommendations to assist congressional efforts to reauthorize the Higher Education Act.

The Office of Federal Relations is closely tracking this legislation and continues to work on this issue.

For more information on HR 1911, the Smarter Solutions for Students Act.

For more information on HR 1949, the IPEDS Act.

As the Office of Federal Relations continues to track the proposals and progress made on legislation affecting the student loan interest rate, below is a chart highlighting the proposals to date and major proposals.

Options continue to multiply as the July 1 deadline raising the 3.4 percent interest rate to 6.4 percent is quickly approaching. Soon, colleges will begin originating loans for the fall semester not long afterward. Congressional insiders predict that if the rate is allowed to double, Congressional Republicans will likely lose their appetite for addressing the issue because students will not feel the impact immediately.

The many options, and the apparent disagreement among Senate Democrats and the White House, mean that the fate of any successful bill may rest on the House’s ability to pass a measure that will then be amended in the Senate. Further, it puts the Obama administration in the unusual position of being allied most closely with Congressional Republicans, making the some of the most unusual bedfellows.

Continue reading “Charting the student loan interest rate proposals”