Interest Rates (Photo credit: 401(K) 2013)
Jenna Johnson | The Washington Post | Reader Supported News | July 19, 2013
Under pressure from the White House, Senate leaders are quickly moving forward with a plan to change how the government sets federal student loan interest rates, tying them to market rates but imposing caps on how high those rates can go.
Senate Majority Leader Harry Reid (D-Nev.) said Thursday that a vote could come this week, but senators who worked on the proposed legislation said next week is more likely.
A bipartisan group of senators reached a compromise on Thursday morning following weeks of negotiations, as Department of Education staffers camped out in their offices. On Tuesday, the senators ventured to the White House to meet with President Obama, who urged them to make a decision.
Under this new proposal, undergraduates would all pay the same interest rate, a change from recent years when some low- and middle-income students received a lower rate. Graduate students and parents of students would pay higher interest rates with higher caps.
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