Bank on Students Loan Fairness Act

Bank on Students Loan Fairness Act - Amends title IV (Student Assistance) of the Higher Education Act of 1965 to direct the Board of Governors of the Federal Reserve System to provide the Secretary of Education, from the combined earnings of the Federal Reserve System, with the amount the Secretary determines to be reasonably necessary to award Direct Stafford Loans during the award year beginning July 1, 2013, to all eligible students attending participating institutions of higher education selected by the Secretary.

Prohibits appropriated funds from being used for Direct Stafford Loans made during that period.

Sets the interest rate on Direct Stafford Loans first disbursed on or after July 1, 2013, and before July 1, 2014, at the primary credit rate charged by the Federal Reserve banks on July 1, 2013.

[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 897 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                 S. 897

  To prevent the doubling of the interest rate for Federal subsidized 
 student loans for the 2013-2014 academic year by providing funds for 
  such loans through the Federal Reserve System, to ensure that such 
   loans are available at interest rates that are equivalent to the 
interest rates at which the Federal Government provides loans to banks 
through the discount window operated by the Federal Reserve System, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 8, 2013

  Ms. Warren introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
  To prevent the doubling of the interest rate for Federal subsidized 
 student loans for the 2013-2014 academic year by providing funds for 
  such loans through the Federal Reserve System, to ensure that such 
   loans are available at interest rates that are equivalent to the 
interest rates at which the Federal Government provides loans to banks 
through the discount window operated by the Federal Reserve System, and 
                          for other purposes.

    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 ``Bank on Students Loan Fairness 
Act''.

SEC. 2. PROVISION OF FUNDS FOR 2013-2014 FEDERAL DIRECT STAFFORD LOANS.

    Section 451 of the Higher Education Act of 1965 (20 U.S.C. 1087a) 
is amended by adding at the end the following:
    ``(c) Provision of Funds for 2013-2014 Federal Direct Stafford 
Loans.--
            ``(1) In general.--The Board of Governors of the Federal 
        Reserve System shall make available to the Secretary, from the 
        combined earnings of the Federal Reserve System, the amount 
        determined by the Secretary to be reasonably necessary to award 
        Federal Direct Stafford Loans during the award year beginning 
        July 1, 2013, to all eligible students in attendance at 
        participating institutions of higher education selected by the 
        Secretary to enable such students to pursue their courses of 
        study at such institutions.
            ``(2) Administration by secretary and similar terms.--The 
        Federal Direct Stafford Loans funded under this subsection for 
        the award year beginning July 1, 2013, shall be administered by 
        the Secretary and shall be made in accordance with the 
        requirements, and be subject to all terms and conditions, of 
        this part, except that appropriations provided under the first 
        sentence of subsection (a) shall not be used for any Federal 
        Direct Stafford Loans made during such period.''.

SEC. 3. ADJUSTMENT OF FEDERAL DIRECT STAFFORD LOAN INTEREST RATES.

    (a) In General.--Section 455(b)(7) of the Higher Education Act of 
1965 (20 U.S.C. 1087e(b)(7)) is amended by adding at the end the 
following:
                    ``(E) Reduced rates for fdsl loans disbursed on or 
                after july 1, 2013, and before july 1, 2014.--
                Notwithstanding the preceding paragraphs of this 
                subsection and subparagraph (A) of this paragraph, for 
                Federal Direct Stafford Loans made to undergraduate 
                students for which the first disbursement is made on or 
                after July 1, 2013, and before July 1, 2014, the 
                applicable rate of interest shall be the primary credit 
                rate charged by the Federal Reserve banks on July 1, 
                2013, for purposes of sections 13 and 13A of the 
                Federal Reserve Act (12 U.S.C. 342 et seq.).''.
    (b) Conforming Amendments.--Section 455(b)(7)(D) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(b)(7)(D)) is amended in the 
subparagraph heading by striking ``fdsl'' and inserting ``fdsl issued 
on or after july 1, 2006, and before july 1, 2013''.
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