Remember when student loan rates doubled in July after a lack of congressional action to stop it? That’s been reversed, after President Obama signed a law that restores lower interest rates for students.
Republicans and democrats were finally able to come up with, what the President called a sensible, reasonable approach.
The compromise came about after a series of summer negotiations.
President Obama cautioned, however, that to job for lawmakers “is not done.”
Though lawmakers agree that doubling student rates
is bad for students, they still disagree on the how future loan rates should be set.
The legislation compromised upon currently links student loan rates
to financial markets. It only allows rates to lower for the fall because the government is currently able to borrow at cheaper rates
As a result, some 11 million students will receive lower interest rates
. This equates to saving an average undergraduate student nearly $1,500 in interest charges on their loans this year.
The President is hoping that the current compromise is the first of many that will make college
more affordable for students in America, since college has become a necessity for many to remain competitive in the workplace
“The cost of college
remains extraordinarily high,” said President Obama. “It’s out of reach for a lot of folks. We've got to do something about it.”
As his presidency proceeds, the President is looking to continue bipartisan efforts to ease the burden of families having to pay for higher education.
White House officials have reported that the President is planning to lay out more aggressive strategies in the upcoming months to lower the cost of higher education.
Additionally, congressional officials are hoping to attempt a rewrite of the Higher Education Act come fall, in hopes to begin the process of curbing college costs
Without action, the loan rates would have remained at the doubled rate of 6.8 percent.
Students can breathe easy – at least for the 2015 academic year. Once the academic year has passed, rates are expected to climb once again, according to congressional estimates based on the Treasury notes.
Let’s hope a successful solution is implemented before then or students will be back to the panic they experienced in July.
What would you do to combat the rising rates if you were a part of the decision making process?