Policy Update: June 29, 2012
STUDENT LOAN INTEREST RATE FIX
Congress was finally able to find a compromise on the offset for the delayed student loan interest rate increase. The bill, which passed 373 to 52 in the House, and 74 to 19 in the Senate, would maintain the student loan interest rates at 3.4% for another year. This was paid for though adjusting requirements for federal pension funds and insurance premiums on those funds. However, the bill would also enact a new eligibility restriction: limiting eligibility for subsided loans (forstudents who start taking out loans after July 1, 2013) to 150 times the stated program length. For example, for a four year undergraduate program, students would be eligible for six years of subsidized loans. The extension will save about 7.4 million students an average of $1,000 over the life of the loan.
Finally, as a reminder, two additional student loan program changes will take effect on July 1st. Graduate and professional students will no longer be eligible for Subsidized Stafford loans and the post-graduation 6-month grace period on Subsidized Stafford Loans will be suspended for loans originated during thenext 2 years, until June 30, 2014.
In the end, passing this bill is a positive outcome for our students who benefit from federal student aid.