Congress Prevents Student Loan Rate From Doubling

29/06/12 4:46 PM

New subsidized Stafford loans for college undergraduate were scheduled to double (from 3.4% to 6.8%) on July 1st. But last Friday, June 29, Congress approved a bill that will extend the 3.4% interest rates on student loans for another year. The House passed the bill 373 to 52 and the Senate 74 to 19 (NY Times). All the opposing votes were by Republicans. President Obama is set to sign the bill in the up coming weeks.

7.4 million students expecting to get educational loans this up coming year can rest easy for another year. If the bill had not been approved, the student loan participants would have been looking at an extra $1,000 to the average cost of each loan.

Recent college grads are already having financial issues paying off their loans as it is. Currently, the average college student is graduating with over $20,000 of debt.

Certain city communities are beginning to see student debts as opportunities to attract young, college graduates to become residents.  Rural counties such as Niagra Falls, NY are offering to pay off debts of recent grads who move to their location. To be eligible, residents must hold either an associate’s, bachelor’s or post-graduate degree, have an outstanding student loan balance and establish residency in a participating county (CNBC article)





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