The college experience is becoming big banking business and those students entering college in the fall will get the raw end of the deal in pursuit of their education.
On Monday, July 1, the government is set to double the interest rates on subsidized Stafford loans from 3.4 percent to 6.8 percent as the chairman of the Senate education panel, Sen. Tom Harkin’s petitions for lawmakers to “put this off for a year” fell on deaf ears. But it is possible that Harkin and his colleagues could “retroactively restore” the current interest rate after the fourth of July, according to ABC.
According to the Congress’ Joint Economic Committee, the boost in interest rates will cost the average student approximately $2,600.
“Neither party wants to see rates rise next week,” said Sen. Richard Burr, R-N.C. But a one-year rate extension isn’t an acceptable option, either, he said. “Last year we kicked the can down the road and passed a one-year extension for only a small group of students. … Why would we make the same mistake again and just kick the can down the road another year?” said Burr, who was among a group of senators who worked on a competing proposal with Sen. Joe Manchin, D-W.Va.
It has become a case of pointing fingers between the party responsible for the rate hike, but both parties lose as they struggle over the resolution after the holiday. Republican Tennessee Senator Lamar Alexander suggest that their budget is similar to what Obama has even proposed.
“This agreement is very much like the proposal in the president’s budget, it is very much like the proposal passed by the Republican House of Representatives and it will save billions of dollars in interest for all 11 million students taking out loans this year by dropping rates on all student loans.”
It sounds like it’s time to get those grades up and start applying for scholarships kids! Read more here.