Brief relief, long-term questions on student loans

About $1.2 billion of the $6 billion cost of the low-interest rate extension comes from a GOP plan to limit federal subsidies on Stafford loans for undergraduates to six years.

Congress might have averted a doubling of interest rates on millions of new federal student loans, but the fix is only for a year, leaving students on edge over whether they’ll face a similar increase next summer.

“It’s scary,” said Faith Nebergall, a student at Indiana University whose loans currently total upward of $20,000. “And it’s unfair to kind of be kept in the dark as to how much money we owe.”

Under an agreement passed June 29, interest rates on new subsidized Stafford loans will remain at 3.4 percent for another year. That’s estimated to save 7.4 million students about $1,000 each on the average loan, which is usually paid off over 10 or more years.…Read More

White House meeting could bring good news to students

With a deadline looming, Vice President Joe Biden says the Obama administration is examining a proposal from congressional Republican leaders on how to prevent interest rates on some student loans from doubling, the Associated Press reports.

“We’re not going to trade off student loans for other vital, vital programs,” Biden said, responding to a reporter’s question during a White House meeting with college officials.

The White House stance means negotiations with congressional Republicans will likely go to the brink before being resolved. Both parties favor extending current 3.4 percent interest rates on subsidized Stafford loans for another year, but they have been divided over how to pay for it. The current rates expire July 1……Read More