A bipartisan bill that would lower the costs of borrowing for millions of students is awaiting President Barack Obama’s signature.
The House last week gave final congressional approval to legislation that links student-loan interest rates to the financial markets. The bill would offer lower rates for most students now, but higher rates down the line if the economy improves as expected.
Undergraduates this fall would borrow at a 3.9 percent interest rate for subsidized and unsubsidized Stafford loans. Graduate students would have access to loans at 5.4 percent, and parents would borrow at 6.4 percent. The rates would be locked in for that year’s loan, but each year’s loan could be more expensive than the last. Rates would rise as the economy picks up and it becomes more expensive for the government to borrow money.
Rates on new subsidized Stafford loans doubled to 6.8 percent July 1. Without congressional action, rates would have stayed at 6.8 percent.
A version of this article appeared in the August 07, 2013 edition of Education Week as Student-Loan Measure to Drop Rates, for Now