II
Calendar No. 142
113th CONGRESS
1st Session
S. 1334
IN THE SENATE OF THE UNITED STATES
July 18, 2013
Mr. Manchin (for himself, Mr. Burr, Mr. King, Mr. Coburn, Mr. Carper, Mr. Alexander, Mr. Harkin, and Mr. Durbin) introduced the following bill; which was read twice and ordered placed on the calendar
A BILL
To establish student loan interest rates, and for other purposes.
Short title
This Act may be cited as the
Bipartisan Student Loan Certainty Act
of 2013
.
Interest Rates
Interest Rates
Section 455(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(b) ) is amended—
in paragraph (7)—
in the paragraph heading, by inserting
and before July 1,
2013
after
on or after july 1, 2006
;
in subparagraph
(A), by inserting and before July 1, 2013,
after on or
after July 1, 2006,
;
in subparagraph
(B), by inserting and before July 1, 2013,
after on or
after July 1, 2006,
; and
in subparagraph
(C), by inserting and before July 1, 2013,
after on or
after July 1, 2006,
;
by redesignating paragraphs (8) and (9) as paragraphs (9) and (10), respectively; and
by inserting after paragraph (7) the following:
Interest rate provisions for new loans on or after July 1, 2013
Rates for undergraduate fdsl and fdusl
Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans issued to undergraduate students, for which the first disbursement is made on or after July 1, 2013, the applicable rate of interest shall, for loans disbursed during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of—
a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1 plus 2.05 percent; or
8.25 percent.
Rates for graduate and professional fdusl
Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Unsubsidized Stafford Loans issued to graduate or professional students, for which the first disbursement is made on or after July 1, 2013, the applicable rate of interest shall, for loans disbursed during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of—
a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1 plus 3.6 percent; or
9.5 percent.
PLUS Loans
Notwithstanding the preceding paragraphs of this subsection, for Federal Direct PLUS Loans, for which the first disbursement is made on or after July 1, 2013, the applicable rate of interest shall, for loans disbursed during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of—
a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1 plus 4.6 percent; or
10.5 percent.
Consolidation loans
Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation Loan for which the application is received on or after July 1, 2013, shall bear interest at an annual rate on the unpaid principal balance of the loan that is equal to the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent.
Consultation
The Secretary shall determine the applicable rate of interest under this paragraph after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination.
Rate
The applicable rate of interest determined under this paragraph for a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or a Federal Direct PLUS Loan shall be fixed for the period of the loan.
.
Effective Date
The amendments made by subsection (a) shall take effect as if enacted on July 1, 2013.
Determination of Budgetary Effects
The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled “Budgetary Effects of PAYGO Legislation” for this Act, submitted for printing in the Congressional Record by the Chairman of the Senate Budget Committee, provided that such statement has been submitted prior to the vote on passage.
Study on the actual cost of administering the Federal student loan programs
Not later than 120 days after the date of enactment of this Act, the Comptroller General of the United States shall—
complete a study that determines the actual cost to the Federal Government of carrying out the Federal student loan programs authorized under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ), which shall—
provide estimates relying on accurate information based on past, current, and projected data as to the appropriate index and mark-up rate for the Federal Government's cost of borrowing that would allow the Federal Government to effectively administer and cover the cost of the Federal student programs authorized under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ) under the scoring rules outlined in the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.);
provide the information described in this section in a way that separates out administrative costs, interest rate, and other loan terms and conditions; and
set forth clear recommendations to the relevant authorizing committees of Congress as to how future legislation can incorporate the results of the study described in this section to allow for the administration of the Federal student loan programs authorized under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) without generating any additional revenue to the Federal Government except revenue that is needed to carry out such programs; and
prepare and submit a report to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and the Workforce of the House of Representatives setting forth the conclusions of the study described in this section in such a manner that the recommendations included in the report can inform future reauthorizations of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
July 18, 2013
Read twice and ordered placed on the calendar
