WASHINGTON – The U.S. Senate approved a deal to lower interest rates on some student loans in an 81-18 vote on Wednesday night.
The bill would set this year’s Stafford subsidized student loans at 3.86 percent for undergraduates, a middle ground between last year’s 3.4 percent and the current 6.8 percent rate.
The interest rates on the subsidized student loans doubled on July 1 after Congress failed to compromise on a plan to lower the rates. However, the new rates would be retroactive and apply to loans taken out after July 1 under the Senate bill. The interest rate will be based on the U.S. Treasury note’s interest rate with a 2.05 percent add-on. However, the interest rate would rise as the economy thrives, according to the Congressional Budget Office.
To control these rising rates, the Senate capped interest rates at 8.25 percent for undergraduates and 9.5 percent for graduates.
The bill will return to the House to approve these revisions and is expected to pass before their recess.
Colorado Senators Mark Udall and Michael Bennet voted in favor of the bill.
“Sen. Bennet believes we should work to find more ways to make it easier, not harder, for students to afford college,” his spokesman Adam Bozzi said.
U.S. Rep. Scott Tipton, R-Cortez, voted for the House’s version of the bill in May.
The interest rate on these particular loans would be set at 4.6 percent for undergraduates because of a higher add-on percentage of the Treasury note. The bill also capped interest rates at 8.5 percent for undergraduates.
An average of 1,700 Fort Lewis College students have taken out Stafford subsidized loans during the past five years, said FLC spokesman Mitch Davis.
Reader Comments