With the doubling of interest rates on new student loans as of July 1, the House of Representatives passed a bill before the July 4th recess that would shift the student loan interest rates to be tied to the Treasury Bond rates as opposed to Congress setting it on a yearly basis. The Senate has been in tough negotiations on their version of the bill, which would extend the current rates for one year with the goal of overhauling the entire program with the federal government’s Higher Education Reauthorization Act.
The Senate voted at 12:30 on Wednesday, July10 on a motion to end debate and move to a vote – the motion failed by a vote of 51-49. There was concern among some Democratic Senators that Sen. Manchin (D-WV) had developed a bipartisan plan without consensus of the full Democratic party. The negotiations will continue among the Senators and with the House to find some common ground. Staff believe it will fall to a one year extension in the end. The reports from the Senate Congressional offices state there is still time, as the loans impacted are the new loans that will be signed in August, In the long run, if an agreement is not reached, it will impact costs to students from approximately $14-$25 per month.
Many thanks to Carol Holladay for the update.