Part of a Series
With just a few days before student loan interest rates are set to double, party leaders in the Senate have reached a deal to keep the rate steady for 7.4 million students.
“We basically have the student loan issue worked out,” Senate Majority Leader Harry Reid (D-NV) told reporters on Tuesday.
The $6 billion agreement would be paid for primarily through savings from a change in how employer pension payments are calculated. Some savings will also come from tying the amount of time students can borrow at the low rate to the length of their degree program.
Congress must pass this legislation by July 1 to prevent the interest rates from doubling from 3.4 percent to 6.8 percent on federally subsidized Stafford loans. This would keep rates steady for 7.4 million students this fall, saving the average borrower $1,000 over the life of the loan.
For more on this topic, please see:
- Senate Announces Deal to Keep Student Interest Rates Low by Brian Stewart, Tobin Van Ostern, and Abraham White