High Student Loan Interest May get Reversed Today
A vote in the U-S Senate may be a matter of hours away that would reverse course on the recent doubling of student loan interest rates.
Iowa Senator Tom Harkin says a bi-partisan group agreed on a deal yesterday that will bring at least temporary relief for nearly seven-million Americans with student loan debt, including 200-thousand Iowans…
“We’ll have a vote sometime later today that will keep interest rates low for the next couple three years,” Harkin says. “We have a cap on interest rates for undergraduates that will be the same as the cap that we had in the 1990s”.
That rate cap for undergrads would be at eight-and-a-quarter percent. The interest rate on the federally-subsidized loans jumped on July 1st from three-point-four percent to six-point-eight. Under the deal, interest rates would be brought back down through the 2015 academic year, but then they’d climb again…
“So all in all, it’s a compromise, obviously,” Harkin says, “but it’s better than 6.8%, I’ll tell you that”.
Harkin, a Democrat, had been backing a bill that would have frozen interest rates for a year until a better compromise could be reached, but now says he’ll support this new plan. Almost 72-percent of Iowa’s college graduates have student loan debt, the 4th highest percentage in the country. The average Iowa student who took out loans has 29-thousand dollars in debt, the sixth highest rate in the nation.