Here are the best articles from around the web this week talking about student loans…
For the week ending Friday August 2, 2013
Student Loan News:
1. House approves lower rates on student loans:
The House of Representatives passed a bipartisan bill Wednesday to roll back a July 1 jump in student loan interest rates and reduce the borrowing costs for millions of students.
The bill, passed by the Senate last week, now goes to President Obama for his signature.
The legislation links student loan interest rates to the financial markets, offering lower rates for most students now but higher ones down the line if the economy improves as forecast. More details: http://www.usatoday.com/news/
2. How the Student Loan Interest Rate Deal Affects Grad Students:
Congress is expected to enact legislation this week that will dictate student loan interest rates for years to come.
Subsidized Stafford loans, which are only available to undergraduate students, were the center of the rate debate. The interest rate on these loans doubled to 6.8 percent on July 1, but would fall to 3.4 percent for the upcoming school year under the pending legislation.
But undergrads will not be the only students affected by the proposed rate changes. Graduate students will see interest rates on their federal student loans shift, too. Full story: http://www.usnews.com/education/best-graduate-schools/top-graduate-schools/paying/articles/2013/07/31/how-the-student-loan-interest-rate-deal-affects-grad-students
3. Student loan compromise heads toward final vote:
A deal that gives college students and their parents lower interest rates for loans is heading toward its final vote.
The House was expected Wednesday to take up a bipartisan compromise that links student loan interest rates to the financial markets. Immediately, most borrowers would see lower rates for classes this year than last, although the costs are expected to climb in coming years if the economy improves as expected. Discover more: http://www.boston.com/business/2013/07/31/student-loan-compromise-heads-toward-final-vote/nWKKDhVU4lTxZwKUOvpmTO/story.html
Student Loan Blog Posts:
1. Easy Credit Is Inflating a Massive Student-Loan Bubble:
Americans are still talking about the recently deflated housing bubble, but there’s a new bubble in town. It’s the student loan bubble and when this one pops, it might dwarf the wreckage we've witnessed in the real-estate markets.
In the latest news, the Federal Reserve’s Board of Governors warned that soaring student-loan debt has “parallels to the housing crisis,” according to a May report in Bloomberg. As with housing, free-flowing cash will lead to widespread default. Of course, it’s easier to repossess a tract house than to take back a potentially worthless degree. Original article: http://reason.com/archives/2013/06/21/easy-credit-is-inflating-a-massive-stude
2. Expert offers insight as Congress nears student loan compromise:
Relief could finally be in sight for those who are taking out student loans this year. Congress is expected to reach a compromise on interest rates for subsidized Stafford loans this week, and President Obama has said he will sign it right away.
Though a deal is near, Fox59 News spoke to a local expert to answer some common questions that borrowers still have. Main site: http://fox59.com/2013/07/30/expert-offers-insight-as-congress-student-loan-compromise-nears/
3. Democrats divided over student loan bill:
Senate Democrats are increasingly divided over the bipartisan student loan rates bill blessed by leadership last week.
The bill is expected to come up for a vote as early as Tuesday and pass with strong votes from both parties, though a number of Democrats have publicly blasted the bill, including Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Jack Reed (D-R.I.) and Richard Blumenthal (D-Conn.).
Reed and Sanders are trying to ensure that their alternative proposals get votes before agreeing to move forward on a bill that took weeks for bipartisan negotiators to finish. Sanders wants a vote on his amendment to sunset the bill to sunset after two years when interest rates are projected to rise while Reed wants more stringent caps on loan rates. Read more: http://www.politico.com/story/2013/07/student-loan-bill-democrats-94572.html