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House Panel Moves Student Loan Interest Measure

May 17, 2013—The House Committee on Education and the Workforce May 16 approved, largely along party lines, the Smarter Solutions for Students Act (H.R. 1911) to establish variable, market-based interest rates for Stafford loans. Much of the hearing focused on the need to avoid doubling the interest rate on subsidized Stafford loans available to undergraduate students.

Full Committee Ranking Member George Miller (D-Calif.) spoke in opposition to the measure and championed a proposal to extend subsidized Stafford loan rates for two years and make further changes in the upcoming reauthorization of the Higher Education Act. Many Democrats, including Subcommittee on Higher Education and Workforce Training Ranking Member Ruben Hinojosa (D-Texas), echoed Rep. Miller’s opposition, citing the expectation of variable interest rates under H.R. 1911 to rise above current rates.

Rep. Jared Polis (D-Colo.) was the lone Democrat to speak in favor of the bill, stating that the bill will save families money in the short term and “is a step in the direction of the president’s proposal.”  He highlighted the interest rate cap intended to protect students from “runaway interest rates.” Rep. Polis also recommended consideration of the Earnings Contingent Education Loans Act of 2013 (H.R. 1716), introduced by Rep. Tom Petri (R-Wis.) April 24.

Rep. Phil Roe, M.D., (R-Tenn.), an obstetrician, noted the high debt of current medical school graduates in contrast to the cost of his own medical education.

H.R. 1911 would set variable Stafford loan interest rates each year based on the 10-year Treasury Note, plus 2.5 percent for subsidized and unsubsidized Stafford loans, and plus 4.5 percent for PLUS loans. Unlike the president’s budget proposal, H.R. 1911 includes an 8.5 percent cap on Stafford loan interest rates and a 10.5 percent cap on PLUS loans [see Washington Highlights, May 10].


Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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