Senate freezes student loan rate increase

Senate leaders have removed an increase in student loan rates (an unpopular idea for students and their families} from the table, at least for another year — pending House approval. But since we already know which party was trying to double the interest rates, I don’t think students are going to forget:

More than 7 million college students could be spared higher loan rates under a deal reached Tuesday by Senate leaders.

The agreement would freeze the interest rate for a year, preventing it from doubling from 3.4 percent to 6.8 percent on July 1, making college more affordable for students even as tuition costs are rising.

Although leaders in both parties said they favored the rate freeze, they argued about how to cover its $6 billion cost.

While they bickered, President Obama traveled the country to rally college students to press for congressional action. If the deal emerges from Congress intact, Obama is likely to take credit for having forced the issue to the front of the agenda, but Republicans have countered that an agreement could have been reached weeks ago had Democrats not decided to make it a campaign issue. Republicans say that Democrats slow-walked the negotiations to allow the president to paint the GOP as the recalcitrant party and willing to risk higher college costs.

The deal was announced Tuesday by Senate Majority Leader Harry M. Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), who told reporters that they had worked out the arrangement but were still discussing how to push it through Congress in the final busy days before lawmakers leave Washington for a week-long Fourth of July holiday.

The proposal’s passage will be contingent upon an embrace from the GOP-held House, although McConnell indicated that he thinks the chamber’s leaders will favor the deal.

One thought on “Senate freezes student loan rate increase

  1. This is how the Congress (our elected representatives) works with the 1% to produce the smoke and mirrors that passes for “doing the people’s business.” The rate freeze will be paid for by “raising premiums for federal pension insurance.” Which is OK with big business because the Congress will now “change the rules on how businesses ‘calculate’ their pension liabilities.” If you’re not aware of what pension insurance is or what formula is currently being used to calculate it you should be. Because what the Congress has done with this clever deal is to put your pension at risk. It may turn out to be underfunded when you want to collect it at retirement.

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