Senators ready to restore lower college loan rates
Source: AP-Excite
By PHILIP ELLIOTT
WASHINGTON (AP) - A bipartisan compromise on student loans promises better deals for students and parents over the next few years but could spell higher rates as the economy improves.
The Senate deal pegs the interest rates on new loans to the financial markets and was expected to come to a vote next week, well before students returning to campus this fall have to sign their loan agreements.
Under the deal, undergraduates this fall could borrow at a 3.9 percent interest rate. Graduate students would have access to loans at 5.4 percent, and parents would be able to borrow at 6.4 percent. Those rates would climb as the economy improves and it becomes more expensive for the government to borrow money.
The compromise undoes the doubling of rates on some student loans that took hold on July 1, and one analysis of the Senate deal suggests incoming freshmen would save more than $3,300 in interest.
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Sen. Tom Harkin, D-Iowa, chair of the Senate Education Committee, announces to reporters that a bipartisan agreement was reached on lowering rates for government student loans, at the Capitol in Washington, Thursday, July 18, 2013. At left is Sen. Tom Carper, D-Del., with Sen. Joe Manchin, D-W.V., at right. (AP Photo/J. Scott Applewhite)
