Friday, June 7, 2013

Senate takes up fixes to student loan rates

(AP) ? Senators on Thursday are considering competing versions of legislation that would keep interest rates low for some college students ? at least for now.

Senate Democrats were set to push to keep interest rates for new subsidized Stafford loans at 3.4 percent for the next two years while they consider a more comprehensive overhaul. Senate Republicans, meanwhile, were pushing for a bill that would link interest rates to 10-year Treasury notes, meaning rates would start lower but climb higher as the economy improves.

It was not clear either proposal had sufficient votes to cross the 60-vote threshold.

Interest rates on new subsidized Stafford loans are set to double on July 1 without congressional action.

Lawmakers last year passed a one-year extension of the interest rates in the middle of the presidential campaign. But now, there seems a lack of consensus with little more than three weeks before interest rates increase. If nothing happens, students taking new subsidized Stafford loans would see an extra $1,000 costs for each year of maxed-out loans.

The Republican-led House already has passed legislation that pegs interest rates to 10-year Treasury notes. The legislation would be a good deal for new students in the first few years but would spell higher rates ? and costs ? if the economy improves and interest rates increase.

The White House has threatened to veto that legislation.

The debate on student loans comes as both the House and the Senate start work on the unrelated No Child Left Behind legislation. That measure, which came up for renewal in 2007 but saw no votes, governs students in kindergarten to high school.

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Follow Philip Elliott on Twitter: http://www.twitter.com/philip_elliott

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/89ae8247abe8493fae24405546e9a1aa/Article_2013-06-06-Student%20Loans/id-02abe886d18b41c7aa404c18b0223a5b

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