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House to take up Kline bill on student-loan interest rates

Occupy Wall Street demonstrators wearing signs around their neck
REUTERS/Andrew Burton
Occupy Wall Street demonstrators wearing signs around their neck representing their student debt during a protest in Union Square in 2012.

“We look forward to working with members of both parties in the House and Senate to reach a solution that will prevent the doubling of rates and will keep college affordable for students and families now and in the future,” she said.

  • 2.5 percent for subsidized and unsubsidized Stafford Loans, with a cap at 8.5 percent (current rates are 3.4 percent and 6.8 percent respectively);
  • And 4.5 percent for graduate and Parent PLUS loans, capped at 10.5 percent (the current rate is 7.9 percent).

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Comments (7)

Complete Report

Senator Elizabeth Warren is pushing legislation to allow college students to borrow at the same rates that banks do, .75%. Why was that not included in this piece?

exactly my question

How can Senator Elizabeth Warren's bill not even rate a mention in this discussion? Not a serious contender? (if so, why?) Some other issues that the average reader is not aware of? overlooked in haste to make deadline?

I agree

If banksters can borrow at .75% then why can't students. I am also wondering why education isn't free (paid for by taxes) like more advanced countries.

Student Loan Interest Rates

While we charge our students to get an education and they struggle to repay their loans throughout their careers, Congress drives a stake in their hearts as if they are modern day vampires with a 10.75% interest rate. Is it any wonder we only produce 1400 PHDs annually and that number is on the decline?

In the meantime, as we lead with surrealistic levels of political incompetence, China is the new world leader in space sciences, medicine, mathematics, bioengineering, mechanical, chemical, computer and electrical engineering. There is a simple reason for this, China produced and paid for their students to get an education and attend school. The students had to qualify for continued education by maintaining a grade point average and lesser students were dropped out and re-assigned employment. It was employment based on their level of education.

In continuation of this policy, China has produced 300,000 PHDs and have secured their economic position as the dominant power in every aspect of labor for decades to come.
If we do not invest in the future of our own children, they cannot invest in us. Other countries have followed their lead. India and Pakistan are following suit with similar programs.

Costs too high

Capitalization of education, like healthcare, should be thought of as a crime against human beings. "Educational Products" like Phoenix "University" are fundamentally scams that offer a feel good solution to all that money wasted. Indebted students make good toady workers, which is one reason for making sure they are ground down under that inescapable debt. Having observed what you now get for your educational dollar I am very glad to have gone to school 40 years ago. And sport on campus has far too high a profile, but then, the bucks hang out there it seems, so new facilities are a go. Education and healthcare need to be cradle to grave benefits to the citizen. A healthier, smarter nation would evolve, but that is clearly what is not wanted by those whom we elect to "serve" us.

Market? What Market?

This kind of reporting corroborates the critique of today's journalists as being mere "stenographers to power." Where's the context? Why didn't this writer dig deeper than "market" vs "legislation" when it comes to setting student loan interest rates? Senator Warren's bill paints a big fat bright red bullseye on the duplicity of the present system. If the Federal Reserve can originate loans at 0.75 percent interest for Wall Street's zombie banks, then why not for the next generation of college-educated teachers, engineers, medical professionals, business managers, and so on, people who might actually contribute something useful to the world?

Another failure in basic economics

I don't know why republicans like Kline have so much trouble with this. What "market" is he talking about? The education market? The loan market? There is no market here. We have an education system and a payment system, it's not about having or creating a "market", it about getting college degrees and paying for them.

Markets are not inherently efficient, look at the current gas prices, or the American auto industry, or the financial sector. Kline is trying to create a market where none exists under the false assumption that a "market" would be more efficient than education system. All this does is add layers of unnecessary complexity and pervert the enterprise, as if making money off of the loans is more important than the cost of education. And of course all this would do is increase the cost of loans. Duh.