Congress may have averted a doubling of interest rates on millions of new federal student loans, but the fix is only for a year.
Just in time, Congress finally came to an agreement on the fate of interest rates for the college Stafford loans, meaning rates won’t be doubling this year for millions of college students around the nation.
By a vote of 373-52 in the House and 74-19 in the Senate, Congress approved a measure that capped the student loan interest rates and that provided for more transportation spending—both of which will be paid for by changes in the pension law. Joined at stop after stop by college students, President Obama has been traveling around the country bashing Republicans for allowing interest rates to rise on student loans. Republicans didn’t want to get accused of alienating the youth vote just months before a pivotal president election—proving that Democrats and Republicans actually can come together and get things done in Congress when both sides feel their futures are at stake (as opposed to feeling like the futures of average Americans are at stake, which clearly isn’t enough to move Republicans in Washington to do anything).
If Congress hadn’t acted to cap the rates by Sunday, rates on Stafford loans would have doubled from 3.4 to 6.8 percent—meaning the average student could pay an additional thousand dollars a year, according to some estimates.
“While there is still a lot of work left to do to make college more affordable, this deal is a step in the right direction,” said U.S. Rep. Gary Peters, a Bloomfield Hills Democrat, one of co-sponsors of the Courtney-Peters bill that capped the interest rate.