06.06.12 | UPDATE: Stafford Loan Interest Rates
Recently, the U.S. Senate rejected President Barack Obama’s plan to maintain the 3.4% interest rates on federal student loans. If both parties are unable to agree on terms by the July 1 deadline, the rate will jump to 6.8%.
Both parties agree that the rates should remain at 3.4%, but paying for an extension of this proposal would cost $6 billion. So the question is, where will this money come from?
The Democrats are proposing the money come from shutting down a Medicare loophole that business partners can currently use to save money, while the Republicans suggest that eliminating a preventative health fund could provide the funding.
In 2007, when interest rates on subsidized Stafford loans were 6.8%, the Senate approved a law that temporarily reduced the rates to 3.4% for low and middle-income students. While the rates are expected to return to 6.8% on July 1, President Obama is urging legislators to keep those rates at a more affordable level for students and their families.
Learn more about Stafford loans so you can prepare for the upcoming semester.