Deadline Nears For Higher Student Loan Rates

"It's crunch time for students who rely on subsidized government loans -- interest rates on them double to 6.8% on July 1. Only Congress can hold the rates down, and so far it's not looking good. Washington lawmakers aren't close to agreeing on any deal to save the 7 million college students who are taking the subsidized Stafford loans this year. 'We're advising our schools to tell students that their subsidized Stafford interest rates are going to be 6.8% on July 1,' said Justin Draeger, president of the National Association of Student Financial Aid Administrators," CNN Money reports. "Generally, lawmakers in both parties in Congress and the White House agree that something should be done, but they don't agree on what. And, already, the blame game has started in Washington. House Speaker John Boehner, an Ohio Republican, last week sent a letter to President Obama asking him to encourage Senate Democrats to move on student loans. 'I urge you, as president and the leader of your party, to compel your Democratic colleagues to pass a market-based student loan bill,' Boehner wrote. The Republican-controlled House passed a bill last month that would stop the rates from doubling now, but would allow them to rise later. Senate Democrats don't like it. President Obama vowed to veto it, calling it the 'wrong approach.' However, Obama has a plan that's very similar to the House approach. Senate Democrats want to extend the low rates for another two years. They are holding quiet talks with Republicans on ways to extend the low rates in a way that doesn't add to deficits. Still, other aides suggest that allowing the interest rates to rise to 6.8% may be a better outcome compared to other proposals that would jack up rates even more."

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