Senate Rejects Bill That Would Prevent Student Loan Rates From Doubling

By Kali Geldis

The Senate rejected a bill today that would have prevented student loan rates from doubling to 6.8 per cent on July 1.

60 votes were needed to pass the bill, which would have prevented government-subsidized Stafford loans from rising through the elimination of several corporate tax cuts. The final roll call vote was 52-45.

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For those about to take on some Stafford loans, this doesn’t mean that loan rates will necessarily rise on July 1 as planned. The House of Representatives has passed a bill to keep the Stafford loans at 3.4 per cent for another year. That bill, sponsored by House Republicans, would repeal a piece of the Obama administration’s health care act in order to fund the student loan rate reduction.The bill, passed April 27 by the House, is now up for consideration in the Senate as the July 1 deadline looms.

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Bot President Obama and presidential candidate Mitt Romney are in favour of freezing student loan rates at their current levels, as we previously reported. They only differ on how to pay for it.

Both of the bills proposed by the House and the Senate would only extend the current student loan rates for another year. A rate increase would need to be considered again in 2013.

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