Fixed interest rates for student loans will soon be a thing of the past. Last week the House joined the Senate in passing a proposal that would link student loan interest rates to the financial market.
According to a recent Bloomberg news article, this means “9 million undergraduates will pay 3.86 percent on their next loan.”
The passage of this bill means that the “380,000 Illinois undergrads getting ready to take out federal loans will see their interest rates drop by 3 percent as a result,” U.S. Senator Dick Durbin (D-IL) said in a July 26th press release, after the Senate approved the measure.
The bill is expected to be signed into law by President Barack Obama this month.
While student savings could begin as early as this fall, not everyone is lauding the student loan deal.
Read our weekly roundup below to get a better understanding of what a market-based student loan rate will mean for you.
“A bill that would lower the cost of student loans has passed the House and is heading to President Barack Obama for his signature.
The House on Wednesday gave final congressional approval to a bipartisan measure that links student loan interest rates to the financial markets. Most students would see lower interest rates in time for classes this fall.”
“But as the Obama administration and congressional leaders celebrate what they tout as a victory for students, a Huffington Post review of projections and figures compiled by the White House, Congressional Budget Office, College Board and other sources suggests that the legislation may end up doing more harm to household budgets than Washington officials acknowledge.”
“Putting an end to months of congressional gridlock, the House voted on Wednesday to approve a bill that will retroactively lower interest rates on student loans. Students taking out federally subsidized Stafford loans this fall, for example, can expect to see a rate of 3.86 percent.”