Compromise Set to Lower Student Loan Interest Rates
Student loan rates for undergraduates doubled on July 1 from 3.4 percent to 6.8 percent, threatening to further increase college costs for millions of already-strained students.
Fortunately, a bipartisan deal has emerged in the Senate that looks set to lower interest rates before students head back to campus. Here are the main elements of this compromise:
- It immediately and significantly lowers interest rates, giving students the certainty they need to make borrowing decisions.
- It ties student loan interest rates to the market, allowing students to immediately take advantage of today’s low rates.
- It caps overall rates to help protect students from interest rate increases in the years to come.
- It sets the interest rate at a fixed rate for the entire life of the loan in contrast to a GOP proposal that would’ve allowed the rate to change every single year the loan remained outstanding.
You can find out more details about this plan and why it matters HERE.
This can all be a little confusing, but the immediate impact is pretty simple. Here’s what will happen as soon as this compromise becomes law:
BOTTOM LINE: 11 MILLION students will save an average of $1,500 as a result of the student loan compromise the Senate is going to vote on tomorrow. Young people need Congress to act right away to pass this deal.
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