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Senate Finally Acts on Student Loans
Students Deserve Affordable Options, Cost Certainty
(Washington, D.C.) – The Senate approved legislation yesterday to address the doubling of the interest rate on some student loans, which took place on July 1. The bill ties rates to the 10-year Treasury note, plus 2.05 percentage points for both subsidized and unsubsidized portions of the undergraduate loans, 3.6 points for graduate loans and 4.6 points for PLUS loans. Rates are capped at 8.25 percent, 9.5 percent and 10.5 percent, respectively.
Jorge A. Lima, Policy Director of The LIBRE Initiative released the following statement:
"Members of Congress have known for a year that they faced a July 1st deadline before student loan rates doubled. But even with a year to act, the Senate still wound up three weeks late. Students deserve better. They should have certainty about the costs they will face when they finance their higher education. And Congress should not use them as political pawns. Today students can be thankful that Senators have come together on a long-term compromise, and that Majority Leader Reid finally allowed it to come for a vote. Market based rates are a fair and sustainable solution for both students and taxpayers. Ultimately, students will be better off once Washington gets out of the business of setting student loan rates."