U.S. Senate reaches deal on student loans

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Senate negotiators have reached a deal on a new interest rate structure for federal student loans in time to avoid significant rate hikes before the next academic year, the Washington Post reports.

“For the coming school year, undergraduates would see rates of 3.86 percent. That’s lower than the current fixed rate of 6.8 percent … Graduate students would pay about 5.41 percent for the coming year… Loans taken out by parents for their dependent children would have an interest rate around 6.41 percent … Right now, graduate students have interest rates of 6.8 and 7.9 percent, while parents pay 7.9 percent.”

Inside Higher Ed explains the mechanics of the deal: “Undergraduate loans — those that are federally subsidized as well as those that are not — would be set at the Treasury rate plus 2.05 percentage points, while loans for graduate students would be set at 3.6 points above the Treasury rate, and loans for parents at 4.6 percentage points over the T-bill rate. The maximum rate would be capped at 8.25 percent for undergraduate loans, 9.25 percent for graduate student loans, and 10.25 percent for parent loans.”

 

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.