Bipartisan Student Loan Certainty Act

Bill: 113-s-1241
Sponsor: full_name: Sen. Manchin, Joe, III [D-WV]
Introduced: 2013-06-27
Policy area: Education
Subjects: Consumer affairs

Government lending and loan guarantees

Higher education

Interest, dividends, interest rates

Student aid and college costs
Latest action: action_date: 2013-06-27
text: Introduced in the Senate. Read twice. Ordered Placed on Senate Legislative Calendar under General Orders. Calendar No. 125.

Summaries:
action_date: 2013-06-27
action_desc: Introduced in Senate
text: <p>Bipartisan Student Loan Certainty Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to set the annual interest rate on Direct Loans at the bond equivalent rate on 91-day Treasury bills plus: (1) 1.85% for Direct Stafford Loans and Direct Unsubsidized Stafford Loans for undergraduate students, (2) 3.4% for Direct Unsubsidized Stafford Loans for graduate students, and (3) 4.4% for Direct PLUS Loans. </p> <p>Fixes the interest rate on such loans for the period of the loan.</p> <p>Sets the annual interest rate on the unpaid principle balance of Direct Consolidation Loans at the lesser of: (1) the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of 1%; or (2) 8.25%. </p> <p>Makes these interest rate provisions applicable to loans first disbursed on or after July 1, 2013.</p> <p>Requires institutions of higher education (IHEs) to provide student borrowers of title IV loans, prior to or at the time of their departure from school, with information regarding: (1) their options for loan consolidation; (2) the income-based repayment plan, including information about capped monthly payments and loan forgiveness under the plan; and (3) Direct Consolidation Loans.</p>

tv_txt: II Calendar No. 125 113th CONGRESS 1st Session S. 1241 IN THE SENATE OF THE UNITED STATES June 27, 2013 Mr. Manchin (for himself, Mr. King , Mr. Alexander , Mr. Coburn , Mr. Burr , Mr. Carper , Ms. Ayotte , and Mr. Isakson ) introduced the following bill; which was read twice and ordered placed on the calendar A BILL To establish the interest rate for certain Federal student loans, and for other purposes.

1. Short title This Act may be cited as the Bipartisan Student Loan Certainty Act . 2. Interest Rates (a) Interest rate provisions and disclosures Section 455 of the Higher Education Act of 1965 ( 20 U.S.C. 1087e ) is amended— (1) in subsection (b)(7)(C), by inserting and before July 1, 2013, after July 1, 2006, ; and (2) by adding at the end of the following: (E) Interest rate provisions for new loans on or after July 1, 2013 (i) Federal Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans, and Federal Direct PLUS Loans (I) In General Notwithstanding the preceding paragraphs of this subsection or subparagraph (A) or (B), for Federal Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans, and 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— (aa) the bond equivalent rate of 10-year Treasury bills auctioned at the final auction held prior to such June 1; plus (bb) (AA) 1.85 percent for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans for undergraduate students; (BB) 3.4 percent for Federal Direct Unsubsidized Stafford Loans for graduate students; and (CC) 4.4 percent for Federal Direct PLUS Loans. (II) Consultation The Secretary shall determine the applicable rates of interest under this clause after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register on or before June 5 preceding the award year for which the rate is determined. (III) Rate The applicable rate of interest determined under subclause (I) 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. (ii) Consolidation loans 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 lesser of— (I) the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent; or (II) 8.25 percent. . (b) Exit counseling requirement Section 485(b)(1)(A)(vii) is amended— (1) by redesignating subclauses (III) and (IV) as subclauses (VI) and (VII), respectively; and (2) by inserting after subclause (II) the following: (III) the borrower's options for loan consolidation; (IV) information about the income-based repayment plan under section 493C, including information about capped monthly payments and loan forgiveness under such plan; (V) information about Federal Direct Consolidation Loans, which for applications received on or after July 1, 2013, have a maximum interest rate of 8.25 percent, as described under section 455(b)(7)(E)(ii) . 3. Rule of construction Nothing in this Act shall be construed to provide the Secretary of Education with the authority to require, or promulgate regulations requiring, new counseling not otherwise required by section 2, and the amendments made by such section, or the Higher Education Act of 1965 ( 20 U.S.C. 1001 et seq. ). 4. 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.

June 27, 2013 Read twice and ordered placed on the calendar