II 

113TH CONGRESS 

1ST SESSION S. 897 

To prevent the doubling of the interest rate for Federal subsidized student 

loans for the 2013–2014 academic year by providing funds for such 

loans through the Federal Reserve System, to ensure that such loans 

are available at interest rates that are equivalent to the interest rates 

at which the Federal Government provides loans to banks through the 

discount window operated by the Federal Reserve System, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 8, 2013 

Ms. WARREN introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To prevent the doubling of the interest rate for Federal 

subsidized student loans for the 2013–2014 academic 

year by providing funds for such loans through the Federal Reserve System, to ensure that such loans are available at interest rates that are equivalent to the interest 

rates at which the Federal Government provides loans 

to banks through the discount window operated by the 

Federal Reserve System, 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, 


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•S 897 IS

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Bank on Students 

3 Loan Fairness Act’’. 

4 SEC. 2. PROVISION OF FUNDS FOR 2013–2014 FEDERAL DI5 RECT STAFFORD LOANS. 

6 Section 451 of the Higher Education Act of 1965 (20 

7 U.S.C. 1087a) is amended by adding at the end the fol8 lowing: 

9 ‘‘(c) PROVISION OF FUNDS FOR 2013–2014 FED10 ERAL DIRECT STAFFORD LOANS.— 

11 ‘‘(1) IN GENERAL.—The Board of Governors of 

12 the Federal Reserve System shall make available to 

13 the Secretary, from the combined earnings of the 

14 Federal Reserve System, the amount determined by 

15 the Secretary to be reasonably necessary to award 

16 Federal Direct Stafford Loans during the award 

17 year beginning July 1, 2013, to all eligible students 

18 in attendance at participating institutions of higher 

19 education selected by the Secretary to enable such 

20 students to pursue their courses of study at such in21 stitutions. 

22 ‘‘(2) ADMINISTRATION BY SECRETARY AND

23 SIMILAR TERMS.—The Federal Direct Stafford 

24 Loans funded under this subsection for the award 

25 year beginning July 1, 2013, shall be administered 

26 by the Secretary and shall be made in accordance 


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1 with the requirements, and be subject to all terms 

2 and conditions, of this part, except that appropria3 tions provided under the first sentence of subsection 

4 (a) shall not be used for any Federal Direct Stafford 

5 Loans made during such period.’’. 

6 SEC. 3. ADJUSTMENT OF FEDERAL DIRECT STAFFORD 

7 LOAN INTEREST RATES. 

8 (a) IN GENERAL.—Section 455(b)(7) of the Higher 

9 Education Act of 1965 (20 U.S.C. 1087e(b)(7)) is amend10 ed by adding at the end the following: 

11 ‘‘(E) REDUCED RATES FOR FDSL LOANS

12 DISBURSED ON OR AFTER JULY 1, 2013, AND

13 BEFORE JULY 1, 2014.—Notwithstanding the 

14 preceding paragraphs of this subsection and 

15 subparagraph (A) of this paragraph, for Fed16 eral Direct Stafford Loans made to under17 graduate students for which the first disburse18 ment is made on or after July 1, 2013, and be19 fore July 1, 2014, the applicable rate of interest 

20 shall be the primary credit rate charged by the 

21 Federal Reserve banks on July 1, 2013, for 

22 purposes of sections 13 and 13A of the Federal 

23 Reserve Act (12 U.S.C. 342 et seq.).’’. 

24 (b) CONFORMING AMENDMENTS.—Section 

25 455(b)(7)(D) of the Higher Education Act of 1965 (20 


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1 U.S.C. 1087e(b)(7)(D)) is amended in the subparagraph 

2 heading by striking ‘‘FDSL’’ and inserting ‘‘FDSL ISSUED

3 ON OR AFTER JULY 1, 2006, AND BEFORE JULY 1, 2013’’. 

Æ 


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