Washington, D.C. (KELO AM) – Today, the U.S. House of Representatives passed the Bipartisan Student Loan Certainty Act of 2013, by a vote of 392-31. Rep. Kristi Noem voted in favor of the legislation which provides a long-term solution to the student loan interest rate issue.
“As students prepare for fall classes, it’s important that we provide some certainty for both parents and students who are looking at how to finance college education,” said Rep. Noem. “I was proud to support this legislation weeks ago when it first came to the House floor and am pleased that it will now go to the President’s desk for his signature.”
The Bipartisan Student Loan Certainty Act, an amended version of the Smarter Solutions for Students Act first passed in the House, will:
• Calculate undergraduate Stafford loans using a formula based on the 10-year Treasury note plus 2.05 percent.
• Calculate graduate Stafford loans using a formula based on the 10-year Treasury note plus 3.6 percent.
• Calculate graduate and parent PLUS loans using a formula based on the 10-year Treasury note plus 4.6 percent.
• Protect borrowers in high interest rate environments by including an 8.25 percent interest rate cap on Stafford loans made to undergraduates, a 9.5 percent cap on Stafford loans made to graduate students, and a 10.5 percent cap on PLUS loans.
• Provide stability for students by locking in interest rates for the life of the loans, and prevent future uncertainty about whether Congress is going to act in time to change the interest rate.
The House of Representatives first passed the Smarter Solutions for Students Act on May 23, 2013. The Senate amended and approve the House-passed legislation on July 24, 2013.
This bill also provides retroactive rate coverage to newly issued loans taken out after July 1, 2013.