Here are the best articles from around the web this week talking about student loans…
For the week ending Friday July 12, 2013
Student Loan News:
1. Work resumes after student loan bill fails:
The defeat of a student loan bill in the Senate on Wednesday clears the way for fresh negotiations to restore lower rates, but lawmakers are racing the clock before millions of students return to campus next month to find borrowing terms twice as high as when school let out.
Republicans and a few Democrats blocked a White House-backed proposal that would have restored 3.4 percent interest rates on subsidized Stafford loans for one more year. The failed stopgap measure was designed to give lawmakers time to take up comprehensive college affordability legislation and dodge 6.8 percent interest rates on new loans. Details here: http://www.bostonglobe.com/news/nation/2013/07/10/back-negotiations-after-student-loan-plan-fails/8l1Ptw1ucGXGcbtR3fRhpI/story.html
2. House Republicans bash Senate Dems on student loans:
House Republican leaders gathered with dozens of well-dressed college students on the steps of the U.S. Capitol Monday afternoon to blast Senate Democrats for not yet passing a student loan bill, allowing the interest rate on one type of federal loan to double last week. Stafford loans, which are commonly used by undergraduates, have an original interest rate of 6.8 percent but for six years — up until July 1 — the government subsidized it at a lower rate for low-income students, which for several years has been 3.4 percent.
The Republican-led House passed a bill in late May that establishes a variable interest rate for Stafford loans that’s tied to the government’s cost of borrowing, a concept that President Obama has supported. For the coming school year, that would likely mean a rate of less than 5 percent. In future years, the rate could go as high as 8.5 percent. Main site: http://www.washingtonpost.com/blogs/post-politics/wp/2013/07/08/house-republicans-bash-senate-dems-on-student-loans/
3. Student Loan Deal Reached In Senate Threatens To Raise Future Costs:
A bipartisan group of senators struck a deal late Wednesday to overhaul the federal student loan program, tying interest rates on new loans to the U.S. government’s cost to borrow in a move that immediately reduces the cost to finance higher education, but is forecast to raise borrowing costs for millions of graduate students and parents in about three years.
Rates on new student loans from the Department of Education, the dominant source of college loans, would be pegged to the yield on the 10-year Treasury note. Undergraduates would pay 1.8 percentage points above the government’s cost to borrow for 10 years. Graduate students would pay 3.8 percentage points above the rate. Parents would pay 4.5 percentage points above the benchmark, officials said. Original article: http://www.huffingtonpost.com/2013/07/11/student-loan-deal-senate_n_3577478.html
Student Loan Blog Posts:
1. Democrat on Democrat: Warren spars with Manchin on student loan proposal:
Liberal firebrand Sen. Elizabeth Warren (Mass.) blasted a fellow Democratic senator Tuesday as a dispute over student loan rates escalated divisions within the party.
The clash, which is highly unusual among party colleagues in the upper chamber, came at a private caucus meeting about a subject that is helping Republicans land blows against their Democratic opponents.
“Elizabeth came out very strong against Manchin,” said a Democratic senator who requested anonymity to discuss the exchange. “She said, ‘They’re already making money off the backs of students, and this adds another $1 billion.’” Full article here: http://thehill.com/homenews/senate/309953-warren-rips-manchin-on-student-loan-proposal
2. Senate leadership clashes over student loans:
The top senators of each party engaged each other over student loan rates Tuesday, denouncing each side’s solution and still leaving students without a solution past the July 1 deadline.
“We should be making the burden lighter for students and their families, not seeking profits, and I’m sorry to say that’s what happens now,” Senate Majority Leader Harry Reid said Tuesday. “The two Republican proposals, one from the House, one from the Senate, are worse than nothing — that’s what the students say.” Original article: http://dailycaller.com/2013/07/10/senate-leadership-clashes-over-student-loans/
3. Scrambling for student loan rate fix:
Congress returns to Washington this week groping for a way to retroactively fix a high-profile doubling of some federal student loan rates.
The rate for new subsidized loans shot up from 3.4 percent to 6.8 percent on July 1 after divisions among Senate Democrats made finding a solution untenable. Now with the bright lights of the immigration bill off the upper chamber, student loan rates take center stage. More explanation: http://dailycaller.com/2013/07/10/senate-leadership-clashes-over-student-loans/