Politics as Usual in Washington Hurts Students and Families
U.S. Senator Joe Manchin III (D-W.Va.), joined by fellow Senators Lamar Alexander (R-Tenn.), Richard Burr (R-N.C.), Tom Coburn (R-Okla.) and Angus King (I-Maine) will introduce a proposed compromise plan today tying the rate for undergraduate Stafford loans (both subsidized and unsubsidized) to the 10-year Treasury bill plus 1.85 percentage points.
As an advocate for student borrowers, I don't like it. Any student loan interest bill that reduces the deficit (including this latest version), does so by adding additional costs for students and families. The plan does not place a hard-cap on interest rates, and although the proposed rates would look OK in the short term, experts predict that students' interest rates would soon rise even higher than the 6.8% rate set to apply beginning July 1. At this point, I'd rather see the rate rise and keep fighting for a solution that isn't worse than the problem itself.
To learn more about all of the legislative proposals currently under consideration, click here.
