Like H.R. 1911, the Senate Amendment moves all new student loans (except Perkins loans) to a market-based interest rate. The bill authorizes student loan interest rates to be reset once a year and move with the market. Once a student takes out a loan, the interest rate will become fixed for the life of the loan, much like a fixed rate mortgage. Interest rates would be set using the following formula: undergraduate Stafford Loans (both subsidized and unsubsidized): 10-year Treasury note plus 2.05 percent, capped at 8.25 percent. Graduate unsubsidized Stafford loans: 10-year Treasury note plus 3.6 percent, capped at 9.5 and PLUS loans (both parent and graduate student): 10-year Treasury note plus 4.6 percent, capped at 10.5 percent. The bill eliminates the consolidation loan “cap,” which is currently 8.25 percent.
On Thursday, May 23, 2013, the House passed H.R. 1911, the Smarter Solutions for Students Act, by a vote of 221-198. H.R. 1911 set student loan rates using the following formula: Stafford Loans (both subsidized and unsubsidized): 10-year Treasury note plus 2.5 percent, capped at 8.5 percent. PLUS loans (graduate and parent): 10-year Treasury note plus 4.5 percent, capped at 10.5 percent.
For questions or further information contact the GOP Conference at 5-5107.