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Student loan interest held at 3.4 percent
Interest on federally subsidized Stafford loans will hold at 3.4 percent for another year, as a result of congressional action on Friday. The interest on these college loans had been scheduled to double to 6.8 percent yesterday.
“Those with student loans can now breathe a sigh of relief,” said Delegate Gregorio Kilili C. Sablan (Ind-MP). “Although this is only a one-year reprieve; and we are going to have to continue to work to keep these rates down, where they are affordable.”
In the U.S. House of Representatives the vote was 373-52. Every Democrat voted for keeping interest rates at 3.4 percent. 52 Republicans voted to let the rates rise.
Nationwide 7.4 million students would have been affected by the hike in interest, which would have cost $1,000 on average over the life of the loan.
The interest rate relief was attached to a larger reauthorization of federal highway programs and flood insurance. Finding a way to pay the $6 billion cost of keeping the interest rates at 3.4 percent had been a stumbling block. Republicans had argued for taking the money from federal programs funding preventive health care. Democrats proposed increasing payrolls taxes for those with higher incomes. In the end the money will come from pension changes.
“Education is the key to our Commonwealth’s economic success,” Sablan said. “But paying for higher education has become increasingly more difficult; and the scheduled interest jump would have added to the difficulty. So we can be glad that the increase was averted for another year.”
Stafford loans are available for both undergraduate and graduate students attending college at least part time. The federal loans are one of the lowest-cost options for paying for school. Repayment normally begins after graduation. Students with greater financial need qualify for the federally subsidized loan rate, which has now been extended for a year. (PR)
