Thankfully somebody is working on this:
— David E. Price (@RepDavidEPrice) June 13, 2013
There's a little over two weeks before the interest on these loans will double. House Republicans could easily stop this if they wanted to, because the fix is about as simple as they come:
To amend the Higher Education Act of 1965 to extend the reduced
interest rate for Federal Direct Stafford Loans.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Student Loan Relief Act of 2013''.
SEC. 2. INTEREST RATE EXTENSION.
Subparagraph (D) of section 455(b)(7) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(b)(7)) is amended--
(1) in the matter preceding clause (i), by striking
``2013'' and inserting ``2015''; and
(2) in clause (v), by striking ``2013'' and inserting
That's it. It's no omnibus that requires staff to analyze and put forward desired changes, and there's no politically-motivated riders to sour the bill. But it's still parked in Committee. A Committee that Virginia Foxx (for some strange reason) wields considerable influence on. Here's her solution to the problem:
The Smarter Solutions for Students Act:
Calculates subsidized and unsubsidized Stafford loans using a formula based on the 10-year Treasury Note plus 2.5 percent.
Calculates graduate and parent PLUS loans using a formula based on the 10-year Treasury Note plus 4.5 percent.
Resets student loan interest rates once a year, allowing rates to move with the free market and ensuring borrowers can take advantage of lower interest rates when available.
Protects borrowers in high interest rate environments by including a 8.5 percent cap on Stafford Loan interest rates and a 10.5 percent cap on PLUS loans.
Provides stability for low- and middle-income students working to finance their postsecondary education, and prevents future uncertainty about whether Congress is going to act in time to change the interest rate.
Yeah, that's how you stop the interest rate from moving up to 6.8%, by putting an 8.5% cap on them. Idiot.