Congress Votes to End Fixed Interest for Student Loans

July 31, 2013
student loan news

The Republican-led House on Wednesday voted 392-31 to approve legislation that would peg interest rates on government-backed student loans to a market-based rate, ensuring that nearly 9 million undergraduates will pay 3.86 percent interest on their next loan. The bill is now cleared for approval by President Barack Obama, who called for linking interest rates on Stafford and PLUS loans to the government's borrowing costs in his budget proposal last year. The new rates will be pegged to the yield on the 10-year Treasury note and will be retroactive to July 1 -- the day that the interest rate for subsidized Stafford loans doubled from 3.4 percent to 6.8 percent, matching the rate for unsubsidized loans.
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