Deal Possibly Near on Stopping Student Loan Rate Hike

The clock is ticking louder for Democratic and Republican lawmakers as the July 1 deadline nears that will trigger a doubling of a key student loan interest rate from 3.4 percent to 6.8 percent.
The hitch is how to pay for the $6 billion plan that would keep the rate on the federally subsidized Stafford loans from doubling for another year.
Senate aides from both parties indicated on Friday that negotiators seemed near a compromise on the one-year extension, according to the Associated Press.
A 2007 law gradually reduced interest rates on the Stafford loans. But a provision calls for the rates shoot back up to 6.8 percent this July 1 in a cost-saving strategy.
President Obama has been campaigning hard for the extension, causing a stir among Republicans, who accused the president of politicizing an issue on which both sides generally agree. Democrats counter that Republicans have not moved fast enough to prevent the doubling of rates.
“At a time when a college education has never been more important to finding a good job, it makes no sense to hit 7.4 million students with the equivalent of a $1,000 tax,” Obama said today in his weekly Internet and radio address.
U.S. Treasury and Education officials this week released a study that says what many probably already know – a college degree will get you a higher income.
But the study was more of a marketing tool for the Obama Administration their push to get Congress to extend the lower rate of 3.4 percent.
The study found that the median weekly earnings for a full-time, full-year bachelor’s degree holder in 2011 was 64 percent higher than that of a high school graduate – $1,053 compared to $638.

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