Even With Student-Loan Compromise, Rates Will Likely Increase
"A small bipartisan group of senators is close to reaching a compromise to avert the impending increase on student-loan interest rates, but it’s far from a done deal. And time is running short," The National Journal reports. "Interest rates on unsubsidized Stafford student loans will double from 3.4 percent to 6.8 percent on July 1 unless Congress acts. A proposal emerging from negotiations between Sens. Joe Manchin, D-W.Va., Angus King, I-Maine, Tom Coburn, R-Okla., and Richard Burr, R-N.C., has been a tough sell with Senate Democrats because it doesn’t cap rates on individual loans. Rather, it caps consolidated loans at 8.25 percent and ties interest rates on all new undergraduate Stafford loans to the 10-year Treasury note, plus 1.95 percent. But even if senators can work through their differences, it’s unlikely a vote will come before July 1, with immigration legislation jamming the legislative calendar. The Senate could address the issue retroactively when it comes back from its Fourth of July recess. ... The National Association of Student Financial Aid Administrators, which opposes a short-term extension, has been telling its members to expect the rate to double to 6.8 percent. Group President Justin Draeger said the bipartisan compromise looks promising, 'but then you rub that up against the political reality, it starts to look a little far-fetched.'"
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