II 

Calendar No. 142 

113TH CONGRESS 

1ST SESSION S. 1334 

To establish student loan interest rates, and for other purposes. 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Bipartisan Student 

5 Loan Certainty Act of 2013’’. 

6 SEC. 2. INTEREST RATES. 

7 (a) INTEREST RATES.—Section 455(b) of the Higher 

8 Education Act of 1965 (20 U.S.C. 1087e(b)) is amend9 ed— 


TKELLEY on DSK3SPTVN1PROD with BILLS
2 

•S 1334 PCS

1 (1) in paragraph (7)— 

2 (A) in the paragraph heading, by inserting 

3 ‘‘AND BEFORE JULY 1, 2013’’ after ‘‘ON OR

4 AFTER JULY 1, 2006’’; 

5 (B) in subparagraph (A), by inserting 

6 ‘‘and before July 1, 2013,’’ after ‘‘on or after 

7 July 1, 2006,’’; 

8 (C) in subparagraph (B), by inserting 

9 ‘‘and before July 1, 2013,’’ after ‘‘on or after 

10 July 1, 2006,’’; and 

11 (D) in subparagraph (C), by inserting 

12 ‘‘and before July 1, 2013,’’ after ‘‘on or after 

13 July 1, 2006,’’; 

14 (2) by redesignating paragraphs (8) and (9) as 

15 paragraphs (9) and (10), respectively; and 

16 (3) by inserting after paragraph (7) the fol17 lowing: 

18 ‘‘(8) INTEREST RATE PROVISIONS FOR NEW

19 LOANS ON OR AFTER JULY 1, 2013.— 

20 ‘‘(A) RATES FOR UNDERGRADUATE FDSL

21 AND FDUSL.—Notwithstanding the preceding 

22 paragraphs of this subsection, for Federal Di23 rect Stafford Loans and Federal Direct Unsub24 sidized Stafford Loans issued to undergraduate 

25 students, for which the first disbursement is 


TKELLEY on DSK3SPTVN1PROD with BILLS
3 

•S 1334 PCS

1 made on or after July 1, 2013, the applicable 

2 rate of interest shall, for loans disbursed during 

3 any 12-month period beginning on July 1 and 

4 ending on June 30, be determined on the pre5 ceding June 1 and be equal to the lesser of— 

6 ‘‘(i) a rate equal to the high yield of 

7 the 10-year Treasury note auctioned at the 

8 final auction held prior to such June 1 

9 plus 2.05 percent; or 

10 ‘‘(ii) 8.25 percent. 

11 ‘‘(B) RATES FOR GRADUATE AND PROFES12 SIONAL FDUSL.—Notwithstanding the pre13 ceding paragraphs of this subsection, for Fed14 eral Direct Unsubsidized Stafford Loans issued 

15 to graduate or professional students, for which 

16 the first disbursement is made on or after July 

17 1, 2013, the applicable rate of interest shall, for 

18 loans disbursed during any 12-month period be19 ginning on July 1 and ending on June 30, be 

20 determined on the preceding June 1 and be 

21 equal to the lesser of— 

22 ‘‘(i) a rate equal to the high yield of 

23 the 10-year Treasury note auctioned at the 

24 final auction held prior to such June 1 

25 plus 3.6 percent; or 


TKELLEY on DSK3SPTVN1PROD with BILLS
4 

•S 1334 PCS

1 ‘‘(ii) 9.5 percent. 

2 ‘‘(C) PLUS LOANS.—Notwithstanding the 

3 preceding paragraphs of this subsection, for 

4 Federal Direct PLUS Loans, for which the first 

5 disbursement is made on or after July 1, 2013, 

6 the applicable rate of interest shall, for loans 

7 disbursed during any 12-month period begin8 ning on July 1 and ending on June 30, be de9 termined on the preceding June 1 and be equal 

10 to the lesser of— 

11 ‘‘(i) a rate equal to the high yield of 

12 the 10-year Treasury note auctioned at the 

13 final auction held prior to such June 1 

14 plus 4.6 percent; or 

15 ‘‘(ii) 10.5 percent. 

16 ‘‘(D) CONSOLIDATION LOANS.—Notwith17 standing the preceding paragraphs of this sub18 section, any Federal Direct Consolidation Loan 

19 for which the application is received on or after 

20 July 1, 2013, shall bear interest at an annual 

21 rate on the unpaid principal balance of the loan 

22 that is equal to the weighted average of the in23 terest rates on the loans consolidated, rounded 

24 to the nearest higher one-eighth of one percent. 


TKELLEY on DSK3SPTVN1PROD with BILLS
5 

•S 1334 PCS

1 ‘‘(E) CONSULTATION.—The Secretary shall 

2 determine the applicable rate of interest under 

3 this paragraph after consultation with the Sec4 retary of the Treasury and shall publish such 

5 rate in the Federal Register as soon as prac6 ticable after the date of determination. 

7 ‘‘(F) RATE.—The applicable rate of inter8 est determined under this paragraph for a Fed9 eral Direct Stafford Loan, a Federal Direct Un10 subsidized Stafford Loan, or a Federal Direct 

11 PLUS Loan shall be fixed for the period of the 

12 loan.’’. 

13 (b) EFFECTIVE DATE.—The amendments made by 

14 subsection (a) shall take effect as if enacted on July 1, 

15 2013. 

16 SEC. 3. DETERMINATION OF BUDGETARY EFFECTS. 

17 The budgetary effects of this Act, for the purpose of 

18 complying with the Statutory Pay-As-You-Go Act of 2010, 

19 shall be determined by reference to the latest statement 

20 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 

21 Act, submitted for printing in the Congressional Record 

22 by the Chairman of the Senate Budget Committee, pro23 vided that such statement has been submitted prior to the 

24 vote on passage. 


TKELLEY on DSK3SPTVN1PROD with BILLS
6 

•S 1334 PCS

1 SEC. 4. STUDY ON THE ACTUAL COST OF ADMINISTERING 

2 THE FEDERAL STUDENT LOAN PROGRAMS. 

3 Not later than 120 days after the date of enactment 

4 of this Act, the Comptroller General of the United States 

5 shall— 

6 (1) complete a study that determines the actual 

7 cost to the Federal Government of carrying out the 

8 Federal student loan programs authorized under 

9 title IV of the Higher Education Act of 1965 (20 

10 U.S.C. 1070 et seq.), which shall— 

11 (A) provide estimates relying on accurate 

12 information based on past, current, and pro13 jected data as to the appropriate index and 

14 mark-up rate for the Federal Government’s cost 

15 of borrowing that would allow the Federal Gov16 ernment to effectively administer and cover the 

17 cost of the Federal student programs author18 ized under title IV of the Higher Education Act 

19 of 1965 (20 U.S.C. 1070 et seq.) under the 

20 scoring rules outlined in the Federal Credit Re21 form Act of 1990 (2 U.S.C. 661 et seq.); 

22 (B) provide the information described in 

23 this section in a way that separates out admin24 istrative costs, interest rate, and other loan 

25 terms and conditions; and 


TKELLEY on DSK3SPTVN1PROD with BILLS
7 

•S 1334 PCS

1 (C) set forth clear recommendations to the 

2 relevant authorizing committees of Congress as 

3 to how future legislation can incorporate the re4 sults of the study described in this section to 

5 allow for the administration of the Federal stu6 dent loan programs authorized under title IV of 

7 the Higher Education Act of 1965 (20 U.S.C. 

8 1070 et seq.) without generating any additional 

9 revenue to the Federal Government except rev10 enue that is needed to carry out such programs; 

11 and 

12 (2) prepare and submit a report to the Com13 mittee on Health, Education, Labor, and Pensions 

14 of the Senate and the Committee on Education and 

15 the Workforce of the House of Representatives set16 ting forth the conclusions of the study described in 

17 this section in such a manner that the recommenda18 tions included in the report can inform future reau19 thorizations of the Higher Education Act of 1965 

20 (20 U.S.C. 1001 et seq.). 


TKELLEY on DSK3SPTVN1PROD with BILLS
Calendar No. 142 

113TH CONGRESS 

1ST SESSION S. 1334 

A BILL 

To establish student loan interest rates, and for 

other purposes. 

JULY 18, 2013 

Read twice and ordered placed on the calendar 


TKELLEY on DSK3SPTVN1PROD with BILLS