Loan Interest Rate bill passes the House, now on the way to the President for signature.

Excerpts from the House Education & Workforce Committee announcement:

The House of Representatives today approved with bipartisan support a final version of H.R. 1911, the Smarter Solutions for Students Act (also known as the Bipartisan Student Loan Certainty Act as amended by the Senate).

As passed by the House and Senate, H.R. 1911 will:

Calculate undergraduate Stafford loans using a formula based on the 10-year Treasury note plus 2.05 percent.

• Calculate graduate Stafford loans using a formula based on the 10-year Treasury note plus 3.6 percent.
• Calculate graduate and parent PLUS loans using a formula based on the 10-year Treasury note plus 4.6 percent.
• Protect borrowers in high interest rate environments by including an 8.25 percent interest rate cap on Stafford loans made to undergraduates, a 9.5 percent cap on Stafford loans made to graduate students, and a 10.5 percent cap on PLUS loans.
• Provide stability for students by locking in interest rates for the life of the loans, and prevent future uncertainty about whether Congress is going to act in time to change the interest rate.

To learn more about H.R. 1911, click here.

As was referenced at the last day of the NASFAA Conference, ED will release more guidance on the actual interest rates for the 2013-2014 award year following the President’s signature on the bill.  It is likely that the interest rates will retroactively apply back to July 1, 2013, and also likely that all work to re-program the 13-14 interest rates on student records will fall on the ED side of the process, not on the school side of the process.  Watch for more details to come from ED.