Alexander Announces Agreement To Reduce Student Loan Rates For More Than 200,000 Tennessee Borrowers

Thursday, July 18, 2013

The senior Republican on the U.S. Senate education committee on Thursday announced an agreement had been reached by senators of both parties on a plan to lower interest rates for all students borrowing money for college this year.

Senator Lamar Alexander (R, Tn.) said, “Today’s bipartisan student loan agreement is terrific news for about 202,000 Tennessee borrowers who will be taking out nearly $1.8 billion to help pay for college costs next year.”

Elements of the agreement are as follows:

  • Rates on every student loan made after July 1 will be reduced from 6.8 and 7.9 percent rates that are currently fixed in the law.
  • All undergraduate loans will have the same rate, which this year is 3.86 percent, and will remain fixed for the life of the loan.
  • The plan is simpler because all undergraduate loans—which are two-thirds of all student loans—will have the same low rate.

Senator Alexander said, “This plan is fair to taxpayers and fair to students. It comes as close as possible to not costing taxpayers and not charging students more than the cost of borrowing the money and administering the program.

“It’s realistic because it’s market-based, which means it’s based on what it costs the government to borrow money.

“The rates are fixed for the life of the loan, which provides certainty to students and parents.

“Finally, the plan is a long-term solution that will end the annual political saga of members of Congress jockeying for position to solve the student loans problem.”

The Bipartisan Student Loan Certainty Act requires that, for each academic year, all newly-issued student loans be set to the U.S. Treasury 10-year borrowing rate (specifically, the yield on the 10-year note as determined by the last auction held before June of each year—not the changing daily rate).

The resulting interest rates for loans taken out this year, after July 1, would be 3.86% for all loans for undergraduate students—both subsidized and unsubsidized. Rates would be 5.41% on unsubsidized loans for graduate students, and 6.41% on PLUS loans for parents and graduate students.

These rates would apply retroactively to newly issued loans taken out after July 1.  The interest rate would be fixed over the life of the loan to provide borrowers with certainty to plan for the future.  Additionally, this bill protects against the threat of unforeseen circumstances by imposing a cap to ensure interest rates never exceed 8.25% for undergraduate students, 9.5% for graduate students, 10.5% for PLUS borrowers.  The Congressional Budget Office has determined this legislation would save taxpayers $715 million over ten years.

To learn more about the bill, click here.



Body Found In Candies Creek Behind Cleveland Church

A body was found in a Cleveland creek on Sunday afternoon. Cleveland Police said the body was in Candies Creek behind the Westwood Baptist Church. The body was located just after 2 p.m. An autopsy was to be performed on Monday. (click for more)

Corker Seeks Information On Provision In Tax Reform Conference After "False Reports"

Following what he called false reports over the weekend about his involvement in the tax reform legislation, Senator Bob Corker wrote to Senate Finance Committee Chairman Orrin Hatch (R-Utah) on Sunday seeking information about where the provision in question originated. The senator is not a member of the tax-writing committee and had no involvement in crafting the legislation, ... (click for more)

The Growing Monopoly

Over the last decade, five tech giants have risen to the top, and created, discovered and invented services and products that have made these companies worth billions today. Those five, of course, are Facebook, Apple, Amazon, Microsoft, and Google. Each of these companies are responsible for several products and services that we use in our everyday lives. They have devoured the ... (click for more)

Roy Exum: The Last Day Of School

AUTHOR’S NOTE: This story first appeared in the Chattanooga News-Free Press in the late 1970s and every year about this time I am asked repeatedly about it. It is far and away the most famous story I have ever written – copies have been sent to me from numerous foreign countries, it’s included in teaching manuals and people I haven’t seen in years get in touch when they read it ... (click for more)

Lady Mocs Rally Late To Trip Florida Gulf Coast

What a difference a week makes. Coach Jim Foster was verbally upset and unhappy following a sloppy and uninspired performance by the Chattanooga Lady Mocs and the result was an embarrassing 64-44 loss to Virginia Tech. The Lady Mocs were facing another really good non-conference opponent in the Florida Gulf Coast Lady Eagles, a member of the Atlantic Sun Conference.  ... (click for more)

Commerce Wins Bradley Invitational With Four Champs

CLEVELAND, Tenn. – The host Bradley Bears were the two-time defending champs in their own Bradley Invitational this weekend at Jim Smiddy Arena, but they weren’t able to make it a three-peat. The Commerce Tigers, a powerhouse Class A team from Georgia, had a slim three-point lead going into Saturday afternoon’s medal rounds, but after winning all four of their championship matches ... (click for more)