College Loan Rates Double As Frustration With Congress Grows
"As student loan interest rates doubled Monday, Republicans and Democrats in Washington criticized each other for failing to come to a last-minute agreement and stave off the increase," the Washington Times reports. "But across the nation, students and many in the education community care very little about whose fault it is and instead blame the federal government as a whole for coming up short on a problem that has been on the horizon for 12 months. Congress‘ inaction means that rates for subsidized Stafford loans — about 25 percent of all student borrowing from the federal government — have jumped from 3.4 percent to 6.8 percent. The increase was scheduled to happen last summer, but lawmakers adopted a one-year stopgap measure that froze rates until Monday, promising to tackle a long-term fix between then and now. Instead, partisan gridlock set in, and new student borrowers can expect as much as $2,600 in additional costs over a decade as a result. 'We’re disappointed that lawmakers were unable to find a bipartisan solution that would bring down interest rates for all federal student loan borrowers — despite the fact that the Obama administration and members of Congress have proposed similar solutions that would bring federal student loan interest [rates] down,' said Justin Draeger, president of the National Association of Student Financial Aid Administrators, which represents more than 18,000 financial aid workers at 3,000 U.S. colleges and universities. Indeed, the White House has expressed support for a proposal to tie interest rates to financial markets, rather than have the federal government arbitrarily set them. A Republican-led bill to do just that cleared the House earlier this year, but similar proposals have failed to pass in the Senate. A Democratic bill to extend current, fixed rates for two years also went nowhere."
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