The rule vote allows an hour of debate on the bill, and a final vote is expected by the early afternoon.
"Student loan rates should not be subject to the whims of Washington or seized as bargaining chips," Rep. Virginia Foxx (R-N.C.) said. "The Smarter Solutions for Students Act will remove politics, uncertainty and confusion from the rate-setting equation, and instead anchor student loan interest rates on the 10-year Treasury note."
Democrats said the GOP bill would allow rates to rise too high, and in some years would be worse than just allowing the rates to double. The bill would require the rates to be equal to the 10-year Treasury note rate, plus 2.5 percent.
Rates would be reset each year, and loans from previous years would be charged the newest rate, making them variable-rate loans. However, borrowers would be allowed to consolidate their loans into a fix-rate loan after graduation, which is when most start repaying their loans.
Some estimates say that under this mechanism, the rates could rise above 6.8 percent before the end of this decade, although the bill also caps the rate at 8.5 percent.
"It's very clear that this is going to add $4 billion to the debt of our students who members of Congress lament are so deeply in debt because of the money they have to borrow to go to education," House Education & the Workforce ranking member George Miller (D-Calif.) said. "What the hell is this Congress doing making it more difficult for those kids to go to college?"
Republicans said the only reason the issue is before Congress is because Democrats decided to gradually and temporarily lower the interest rate to 3.4 percent back in 2007, with no plan for what to do once the lower rate expired.
"Instead of working with Republicans on responsible solutions that would help make higher education more affordable for students in the long run, the Democratic Congress chose to make false promises to borrowers and kick the can down the road," Foxx said.
Last year, Congress paid for a one-year extension to keep the rates low. During the rule debate today, Democrats complained that their proposals to find other ways to pay for a further extension were rejected by Republicans on the House Rules Committee — the rule does not allow any amendments to be considered.