Student Loans Get Congressional Attention

"The House is expected to vote Thursday on a Republican-sponsored bill that would tie the interest rate on new federally guaranteed college loans to a market-based rate," The San Francisco Chronicle reports. "HR 1911 would lower rates for most borrowers initially but cost them over the long-term if interest rates rise. It is one of at least eight bills that would change or freeze interest rates on college loans before July 1, when the rate on new subsidized Stafford loans is set to double -- to 6.8 percent from 3.4 percent. These loans go to students from low-income families. Since 2006, the rate on new unsubsidized Stafford loans, available to all students, has been fixed at 6.8 percent. None of the bills would change the rate on loans taken out before July 1 of this year. President Barack Obama also has a college-loan fix in his budget proposal, but it has not found its way into a bill. On Wednesday, the White House threatened to veto HR 1911 if it passes, although it in some way resembles Obama's proposal. ... Justin Draeger, president of the National Association of Student Financial Aid Administrators, opposes a temporary patch and wants 'a long-term solution that is market based.' His group has not backed a bill, 'but we have supported the ideals the president has put forward,' and some parts of the Kline bill, which matches Obama's proposal 'in some respects.' Draeger wants a hybrid model that cuts rates, at least in the short term, for all borrowers."

NASFAA's "Financial Aid in the News" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.