Reid announced Friday that the Senate will vote during the first week of June on legislation to avert the scheduled student loan interest rate increase.
“The bill already passed by the House provides a market-based variable interest rate, mirroring what the president proposed in his own budget,” Boehner said. “The differences between the House plan and the president’s are small, and there’s no reason they cannot be overcome quickly. With time so short and the differences between our proposals so slight, [the president’s] event was misguided and deeply disappointing.”
The House bill would peg interest rates to the 10-year Treasury note rate plus 2.5 percentage points for the subsidized and unsubsidized portions of undergraduate loans and plus 4.5 percentage points for graduate loans. Those rates would be capped at 8.5 percent and 10.5 percent, respectively, and the interest rates would be calculated yearly.
Alternatively, the White House plan would peg interest rates to the 10-year Treasury note rate plus 0.93 percent for the subsidized portion and 2.93 percent for the unsubsidized portion. It would modify the loan for graduate students to 3.93 percent above the 10-year Treasury note. The rates would remain fixed for the life of a borrower’s loan, as opposed to being recalculated yearly.
Senate Democrats and Republican have also introduced market-based rate proposals that could serve as a starting point for negotiations.
The Senate Democratic proposal (S 909) would set rates every year based on the 91-day Treasury bill, plus a percentage determined by the Education secretary. Under the plan, interest rates for subsidized Stafford loans would be capped at a maximum of 6.8 percent, and rates for unsubsidized Stafford and graduate student loans would be capped at a maximum of 8.25 percent; those caps are lower than in the House GOP bill.
The Senate Republican measure (S 682) would set the interest rate for all loans at the 10-year Treasury note plus 3 percent.
The president on Friday urged students and parents to contact their members of Congress to press them to keep the rates from doubling.
“You made something bipartisan happen” last year, he said. “That’s a powerful thing. So this year, if it looks like your representatives have changed their minds, you’re going to have to call them up again or email them again or Tweet them again.”
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.