President Signs Bill Lowering Student Loan Interest Rates
As reported in this week’s FAME Inside Report, and prior August 1 FAME “Did You Know?,” Congress had finally reached agreement on the student loan interest rate debate. Congress passed the Senate-amended version of the House Bill, HR 1911, on July 31 which creates a new interest rate structure that lowers all 2013-2014 undergraduate Direct Loans to 3.86%. All that remained was for President Obama to sign the bill.
Friday, August 9, 2013, the president signed the Senate-amended HR1911 (now known as the Bipartisan Student Loan Certainty Act) into law. The new student loan interest rate structure discussed previously in the FAME Inside Report and “Did You Know?” is now in effect. (Note that the information we previously released gives the full details of the impact on all subsidized and unsubsidized Direct Loan interest rates, including the rates for both undergraduate and graduate level Direct Loans, as well as the rate structure for graduate and Parent PLUS Loans). Click here for more.
As noted in a press release on the House Education and the Workforce Committee’s Website:
“I’m pleased to join President Obama in the Oval Office for the signing of H.R. 1911. This is a great day – not just for students and their families, but for all Americans,” said House Education and the Workforce Chairman John Kline (R-MN), who along with Rep. Virginia Foxx (R-NC) introduced H.R. 1911 in May. “Seeing this bipartisan proposal become law reminds us of what can be accomplished through hard work, compromise, and faith in the legislative process. I look forward to building upon this success as we work toward other shared goals, including raising the bar in the nation’s classrooms by revamping federal K-12 law, strengthening job training opportunities for American workers, and improving college affordability and access through the upcoming reauthorization of the Higher Education Act.”
Sen. Lamar Alexander (R-TN) said in a press release on the Senate Committee on Health, Education, Labor, and Pensions’ Website:
“This permanent, market-based plan makes loans cheaper, simpler and more certain for the 11 million students nationwide – including more than 200,000 in Tennessee – heading to college this fall. We can finally put behind us the annual game of Congress playing politics with student loan interest rates at the expense of students planning their futures.”
As we discussed in our previous article, from an operational standpoint, loans with a first disbursement on or after July 1, 2013, will not require schools to do any reprocessing. New Master Promissory Notes (MPNs) will also not be required since the MPNs do not list the interest rate anywhere. However, we will be sure to keep you informed of any late-breaking guidance from ED.
If you have any questions regarding this information, please contact your Customer Service Representatives via support.fameinc.com.