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Washington Highlights

As Federal Interest Rates Rise, Sen. Warren Introduces Refinancing Bill

May 9, 2014—On May 6, interest rates for federal loans during the upcoming 2014-2015 academic year were set to rise by 0.8 percentage points compared to current rates. As a result, interest rates for medical students‘ Direct Loans and Direct GradPLUS loans will increase to 6.21 percent and 7.21 percent, respectively.

Interest rates are fixed each year based on the 10-year Treasury note under legislation passed last summer [see Washington Highlights, Aug. 2, 2013]. 

Meanwhile, Senator Elizabeth Warren (D-Mass.) May 6 introduced the Bank on Students Emergency Loan Refinancing Act (S. 2292) to allow borrowers with federal Stafford loans dated prior to July 1, 2013, to refinance at the corresponding 2013-2014 academic year interest rates (5.41 percent for Direct Loans and 6.41 percent for GradPLUS).

Under the bill, the Department of Education would be tasked with setting a debt-to-income ratio to determine borrower eligibility for refinancing.

House Education and the Workforce Committee Ranking Member George Miller (D-Calif.) and Rep. John Tierney (D-Mass.) plan to introduce companion legislation in the House.


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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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806