Bipartisan Senate Group Seeks Deal on Student Loans

June 21, 2013
USA Today  
student loan news

A bipartisan team of senators is scrambling to hammer out a compromise that would prevent interest on subsidized Stafford loans from doubling as scheduled on July 1. After that, the rate is set to spike to 6.8 percent from 3.4 percent, although Congress could still address the loan rate retroactively. The compromise currently being negotiated would create a three-tiered rate system for undergraduate, graduate, and PLUS loans that is tied to the interest rate on a 10-year Treasury note and locked in for the life of the loan. Both President Obama and leading Republicans have proposed to tie loan rates to a 10-year Treasury note, while current law allows Congress to set the rate. Democrats, however, are partial to a two-year extension of the current rate, which would buy legislators more time to revise the student loan program next year as part of the reauthorization of the Higher Education Act.
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