Congress passes bill to prevent interest rate increase for subsidized student loans
Congress passes a bill to prevent an increase to federal student loan interest rates.
A sigh of relief for many students. But as our Beth Croughan found out, it's not over yet as legislators will likely be discussing the issue again, next year.
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ALBANY, N.Y. -- Two days before the interest rate for subsidized Stafford loans is set to double, Congress approved a bill that will keep it at 3.4 percent.
"6.8 percent is very high given our current interest rates in the US. And it would have been way out of line. Although, it would have been no surprise," said Beth Post-Lundquist, the Director of Financial Aid at Skidmore College.
Post-Lundquist said the bump from 3.4 to 6.8 percent was scheduled five years ago and the Director of Financial Aid for Skidmore College said it's scheduled again for next year.
"It's great to have this, this extension. To have it at 3.4% for another year. But it's really disappointing to see this as sort of an emergency measure that was able to forseen years ago and nothing happened until right now," she said.
The student loan package includes $6 billion to prevent the increase for more than seven million students. It's tied to a more than $100 billion spending plan for highway, mass transit and transportation programs.
But Dan Lundquist of Sage College believed the bi-partisan vote was tied to the election year and is concerned next year we might see more partisan politics.
"I believe that there are some fiscal conservatives in both parties, but particularly the Republican party who will after, if they get reelected, will say not my $5 billion kids, we're going to either raise the subsidy, raise the rate, or maybe even do away with the subsidy," said Lundquist, the Vice President of Enrollment Management Services at Sage College.
The full bill has been sent to President Obama for his signature.