By Rae Hodge–
On Friday, Congress passed legislation preventing student loan interest rates from doubling on July 1. Rates on subsidized Stafford loans will remain at 3.4 percent for an additional year.
The $6 billion cost of keeping rates at 3.4 percent was fully paid for through a combination of pension fund reforms and by limiting Stafford loan eligibility to 6 years. Without the passage of the legislation, the interest rate hike would have resulted in an increase in $1,000 of debt for every year of school for more than 7.4 million low- and middle-income college students.
“Students already face unprecedented student loan debt and adding an additional $1,000 more would not only crunch individual borrowers, but would have further weighed down the recovering economy. We applaud Congress for coming together to pass this much-needed legislation,” said Rich Williams, U.S. Public Interest Research Group Higher Education Advocate.
The House of Representatives passed the legislation with a bi-partisan vote of 373-52, while the Senate passed the bill with a 74-19 vote. The student loan provisions were included in House Resolution 4348.
Graduate students are still expected lose their eligibility for subsidized Stafford loans under the Budget Control Act of 2011.
photo courtesy of House.gov