Student loan rates set to double July 1
There doesn't appear to be any real movement to halt the increase, which could affect more than 7 million borrowers.
In the past, lawmakers have swooped in to extend low rates for students, or at least delay any increase. But this time around, there doesn't appear to be much political will to do that.
More than 7 million students have the federal Stafford loans that would be subject to the rate increase. Democrats set the rate at 3.4% before Republicans took control of the House in 2011, The New York Times reports. Republicans extended the low rate for one year last June, but it doesn't look as if they'll do it this year.
Lawmakers on both sides have tried to make political hay over the issue. Democrats are painting Republicans as the bad guys for allowing the rate increase through. Republicans say the market, not politicians, should set loan rates, and they have proposed legislation that would reset student rates each year with an 8.5% cap.
The Republican bill would cut the budget by $3.7 billion over 10 years, the Times reported. Then President Barack Obama unveiled his own proposal, which was similar to what the Republicans wanted.
Now the issue has stalled and lawmakers on both sides of the aisle are distracted by immigration and other hot-button issues.
Wednesday, five senators -- including three Republicans, an independent and one Democrat -- began pushing new legislation that would fix student loans to the 10-year U.S. Treasury rate. But Democrats are howling because that proposal doesn't have any caps.
Meanwhile, two Democratic senators are preparing a new bill that would freeze the 3.4% rate for one more year while Congress hammers out an agreement. But that bill probably won't see a vote until later in July.
Luckily, the Times reported, many students don't sign for new loans until August, so there is some time to work on a compromise.
- Apple's new ads put consumers to sleep
- CEOs get paid 273 times more than you do
- 2 more partners drop Paula Deen
I'll preference my comments by agreeing that the financial aid system needs to be revamped to make the cost of attending college fair and equitable. That being said, it doesn't bother me that the rate is being doubled. As a parent of a full-pay student that has to take on unsubsidized loans at the higher rate of 6.8%, I believe all students should pay the same interest rate on their debt upon graduation, whether it's 3.4% or 6.8%. After all, it's the student's debt, not the parent's debt. Upon graduation, the playing field is level and each graduate has the same opportunity to seek gainful employment and pay back their loans. Why are kids with parents that earn a decent living expected to pay a higher rate. Seems unfair to me when we've already paid sticker price for our kid’s education. I don't have a problem paying the tuition, but kids shouldn't be penalized for their parents success.
The less educated our youth, the more social welfare programs we will end up having to pay for. We have enough problems competing in this global economy. Many other countries in the world actually provide free advanced education for their citizens and have a talented, skilled and innovative work force which contribute financially to those countries.
It's impossible, in this day and age, to get decent paying jobs without higher education. Corporations in the high tech fields just recently persuaded Congress to allow them to "import" foreign workers on corporate sponsored "work" visas citing the lack of qualified applicants here in the US. If more young people could afford a higher education, we wouldn't have to import talent from abroad and we'd be a richer nation for it. If we don't, the majority of our population will one day be doing the sweat shop jobs currently found in third world countries today.
Imagine the time machine bringing ANY founder back today to debate the intellectual trash constituting our government now
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] Equity indices ended the Tuesday session on an upbeat note with small-cap stocks pacing the advance. The Russell 2000 jumped 0.9%, while the S&P 500 posted a slim gain of 0.1% with seven sectors ending higher.
In some ways, today's session resembled yesterday's affair as the key indices climbed out of the gate, reached their highs during the first half of action, and spent the remainder of the session in a slow retreat from their best levels of the day. Trading volume ... More
More Market News
The Federal Reserve and Congressional politics threaten to rain on the market party.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'