The higher rates that go into effect Monday only apply to new loans. The loans are generally awarded to only about a third of undergraduate students in financial need. Interest rates are going to double 3.4% to 6.8%. Congress’ Joint Economic Committee estimate an additional $2,600 increase for college students.
Lawmakers in both parties generally agree something should be done to keep the rates down, but they aren’t agreeing on what.
The Republican-controlled House passed a bill to stop rates from doubling now, but would allow them to rise later. Senate Democrats don’t like it. President Obama vowed to veto it. Senate leaders want to extend the low rates for a year or two. This could give Congress time to come up with a longer term solution.
Democratic U.S. Senator, Bob Casey, is a member of the Joint Economic Committee. He says, “paying for college is a major burden for families and students. Congress should come together around a bi-partisan solution to prevent student loan rates from doubling.”
A Senate vote on a bill to keep the current lower rate in place for another year is scheduled for July 10th.