[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1742 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1742
To amend title IV of the Higher Education Act of 1965 to provide for
variable interest rates on student loans.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 16, 2003
Mr. Campbell introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend title IV of the Higher Education Act of 1965 to provide for
variable interest rates on student loans.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Higher Education Loan Plan Act of
2003''.
SEC. 2. INTEREST RATES ON STUDENT LOANS.
(a) Interest Rate Changes.--Section 427A of the Higher Education
Act of 1965 (20 U.S.C. 1077a) is amended by striking subsections (k)
and (l) and inserting the following:
``(k) Interest Rates for New Loans on or After October 1, 1998, and
Before the Date of Enactment of the Higher Education Loan Plan Act of
2003.--
``(1) In general.--Notwithstanding subsection (h) and
subject to paragraph (2), with respect to any loan made,
insured, or guaranteed under this part (other than a loan made
pursuant to section 428B or 428C) for which the first
disbursement is made on or after October 1, 1998, and before
the date of enactment of the Higher Education Loan Plan Act of
2003, the applicable rate of interest shall, 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--
``(A) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
``(B) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
``(2) In school and grace period rules.--Notwithstanding
subsection (h), with respect to any loan under this part (other
than a loan made pursuant to section 428B or 428C) for which
the first disbursement is made on or after October 1, 1998, and
before the date of enactment of the Higher Education Loan Plan
Act of 2003, the applicable rate of interest for interest which
accrues--
``(A) prior to the beginning of the repayment
period of the loan; or
``(B) during the period in which principal need not
be paid (whether or not such principal is in fact paid)
by reason of a provision described in section
427(a)(2)(C) or 428(b)(1)(M),
shall be determined under paragraph (1) by substituting `1.7
percent' for `2.3 percent'.
``(3) PLUS loans.--Notwithstanding subsection (h), with
respect to any loan under section 428B for which the first
disbursement is made on or after October 1, 1998, and before
the date of enactment of the Higher Education Loan Plan Act of
2003, the applicable rate of interest shall be determined under
paragraph (1)--
``(A) by substituting `3.1 percent' for `2.3
percent'; and
``(B) by substituting `9.0 percent' for `8.25
percent'.
``(4) Consolidation loans.--With respect to any
consolidation loan under section 428C for which the application
is received by an eligible lender on or after October 1, 1998,
and before the date of enactment of the Higher Education Loan
Plan Act of 2003, the applicable rate of interest shall be at
an annual rate on the unpaid principal balance of the loan that
is equal to the lesser of--
``(A) the weighted average of the interest rates on
the loans consolidated, rounded to the nearest higher
one-eighth of 1 percent; or
``(B) 8.25 percent.
``(5) Consultation.--The Secretary shall determine the
applicable rate of interest under this subsection after
consultation with the Secretary of the Treasury and shall
publish such rate in the Federal Register as soon as
practicable after the date of determination.
``(l) Interest Rates for New Loans on or After the Date of
Enactment of the Higher Education Loan Plan Act of 2003.--
``(1) In general.--Notwithstanding subsection (h) and
subject to paragraph (2), with respect to any loan made,
insured, or guaranteed under this part (other than a loan made
pursuant to section 428B or 428C) for which the first
disbursement is made on or after the date of enactment of the
Higher Education Loan Plan Act of 2003, the applicable rate of
interest shall, 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--
``(A) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
``(B) 2.3 percent,
except that such rate shall not exceed 7.75 percent.
``(2) In school and grace period rules.--Notwithstanding
subsection (h), with respect to any loan under this part (other
than a loan made pursuant to section 428B or 428C) for which
the first disbursement is made on or after the date of
enactment of the Higher Education Loan Plan Act of 2003, the
applicable rate of interest for interest which accrues--
``(A) prior to the beginning of the repayment
period of the loan; or
``(B) during the period in which principal need not
be paid (whether or not such principal is in fact paid)
by reason of a provision described in section
427(a)(2)(C) or 428(b)(1)(M),
shall be determined under paragraph (1) by substituting `1.7
percent' for `2.3 percent'.
``(3) PLUS loans.--Notwithstanding subsection (h), with
respect to any loan under section 428B for which the first
disbursement is made on or after the date of enactment of the
Higher Education Loan Plan Act of 2003, the applicable rate of
interest shall be determined under paragraph (1)--
``(A) by substituting `3.1 percent' for `2.3
percent'; and
``(B) by substituting `8.5 percent' for `7.75
percent'.
``(4) Consolidation loans.--With respect to any
consolidation loan under section 428C for which the application
is received by an eligible lender on or after the date of
enactment of the Higher Education Loan Plan Act of 2003, the
applicable rate of interest shall, 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--
``(A) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
``(B) 2.3 percent,
except that such rate shall not exceed 7.75 percent.''.
(b) Special Allowance Conforming Changes.--Section 438(b)(2) of the
Higher Education Act of 1965 (20 U.S.C. 1087-1(b)(2)) is amended by
striking ``July 1, 2006'' each place it appears in clauses (ii), (v),
and (vii) of subparagraph (I), including in the headings of such
clauses, and inserting ``the date of enactment of the Higher Education
Loan Plan Act of 2003''.
(c) Additional Conforming Amendments.--Section 428C(c)(1) of the
Higher Education Act of 1965 (20 U.S.C. 1078-3(c)(1)) is amended by
striking ``July 1, 2006'' each place it appears and inserting ``the
date of enactment of the Higher Education Loan Plan Act of 2003''.
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