Politics
House okays student loans bill, awaits Obama assent
A bipartisan bill that would lower the costs of borrowing for millions of students is awaiting President Barack Obama’s signature.
The House on Wednesday gave final congressional approval to legislation that links student loan interest rates to the financial markets. The bill would offer lower rates for most students now but higher rates down the line if the economy improves as expected.
For the moment, the focus was on the class of students signing loans for classes this fall.
The measure passed 392-31.
Undergraduates this fall would borrow at a 3.9 percent interest rate for subsidized and unsubsidized Stafford loans. Graduate students would have access to loans at 5.4 percent, and parents would borrow at 6.4 percent. The rates would be locked in for that year’s loan, but each year’s loan could be more expensive than the last. Rates would rise as the economy picks up and it becomes more expensive for the government to borrow money.
But for now, interest payments for tuition, housing and books would be less expensive under the House-passed bill.
The House earlier this year passed legislation that is similar to what the Senate later passed. Both versions link interest rates to 10-year Treasury notes and remove Congress’ annual role in determining rates.
