Congress Extends Student Loan Rate at 3.4% for 1 Year

After months of political wrangling, Congress today overwhelmingly approved an extension of the low 3.4 percent rate on federally subsidized student loans, avoiding a doubling of the rate on July 1.
The Republican-led House of Representatives and the Senate with a Democratic majority showed uncharacteristic harmony by approving the rate extension as part of a big job-creating transportation bill, which is on the way for President Obama to sign into law.
Had the student loan measure failed, interest rates would have ballooned to 6.8 percent for undergraduates for the coming academic year.
Freshmen who borrow the maximum $3,500 for the year in Stafford loans will save $700 to $1,700 on average over the life of the loan, depending on repayment terms.
The bill approved today also enables more than $100 billion to be spent on highway, mass transit and other transportation programs over the next two years, projects that would have expired Saturday.
The bill passed the House, 373-52. The Senate approved it, 74-19.
The vote ends a political brawl over student loans that simmered since spring, a fight over the hearts and minds of young voters in a presidential election year. President Obama toured college campuses in support of the low-rate extension of Stafford loans that affects 7.4 million students.
The college campaign earned the wrath of Republicans, who accused the president of picking a fight over an issue on which both sides agreed, although Democrats countered that the other side was dragging its feet on the issue.
The bill also extends funding for the National Flood Insurance Program to September 30, 2017. It had been set to expire at the end of July.

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