breaking news

Severe T-storm watch, wind advisory in effect 

Senate approves measure lowering interest on student loans


By Abby Smith

Washington Bureau

The Senate overwhelmingly Wednesday approved a compromise measure that will lower interest costs on student loans in the near future even as critics fear the bill does not permanently guarantee interest rates won’t dramatically rise toward the middle of the decade.

By a vote of 81-18, the Senate sent the bill to the Republican-controlled House where it is expected to easily win approval next week. In a break for students, the compromise cancels a doubling of the interest rate on subsidized Stafford student loans that went into effect on July 1. The new interest rate will now be 3.86 percent.

President Barack Obama hailed the bill’s passage, which he said in a statement would save “undergraduates an average of more than $1,500 on loans they take out this year.”

Obama added that he hopes “both parties build on this progress by taking even more steps to bring down soaring costs and keep a good education – a cornerstone of what it means to be middle class – within reach for working families.”

House Speaker John Boehner, R-West Chester Twp., called the compromise “a permanent, market-based solution on student loans. This bipartisan agreement is a victory for students, for parents and for our economy.”

Sen. Rob Portman, R-Ohio, voted in favor of the bill, and Sen. Sherrod Brown, D-Ohio, opposed the measure.

The compromise, sponsored by Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin, D-Iowa, would link student loan interest rates to the market’s 10-year Treasury note.

Once a student takes out a loan, the interest rate would be fixed for the life of the loan and capped at 8.25 percent for undergraduate students and 9.5 percent for graduate students.

According to a White House press release, “a typical undergraduate borrower in Ohio who borrows $6,747 will save about $1,507 over the life of those loans’’ under the Senate compromise.

But critics, such as Brown, warned that while the compromise might benefit students this year, it would lead to a sharp increase in interest rates in the future. Projections show that undergraduate interest rates could surpass the 8.25 percent cap as early as 2017.

The House’s version, approved in May, would have allowed rates to fluctuate with the market, which critics claimed would have created uncertainty for students taking out loans.


Reader Comments ...


Next Up in News

J. Crew apologizes after photo of black model with messy hair sparks controversy
J. Crew apologizes after photo of black model with messy hair sparks controversy

J. Crew is facing criticism after a photo of one of its models and her seemingly unkempt hair surfaced online. The black woman, dressed in a Madewell dress, was photographed with her natural hair messily pulled back in a ponytail. But everyone wasn’t impressed with the look. >> Read more trending news One Twitter user took to the platform...
PERSPECTIVE: The magic of Thanksgiving togetherness

The calm before the rush of Thanksgiving preparation invites reflection. My mom, although extraordinary in matters of the heart, was really not a very good cook. I’m the first to admit her Thanksgiving turkey was a tad dry, and the cauliflower-au-gratin was s bit more watery than Velveeta cheesy. Yet she managed to create the best of what Thanksgiving...
Heroin dealer convicted of manslaughter after buyer fatally overdoses 
Heroin dealer convicted of manslaughter after buyer fatally overdoses 

A drug dealer was convicted of involuntary manslaughter after selling heroin to a man who later died of an overdose from the opioid.  April Thomas Guthrie, 34, was also convicted of delivery of heroin and was sentenced to three to five years, according to WNCT.  Kendal Walbert died of a heroin overdose in August 2014 after buying heroin...
Revolving restaurant had no protections to stop boy's death, lawsuit says
Revolving restaurant had no protections to stop boy's death, lawsuit says

The company accused of negligence after a 5-year-old died at the Sun Dial restaurant had no comment Friday about a lawsuit filed against it. “Due to the pending litigation, we are not commenting on the matter,” Marriott International, Inc. spokesman Jeff Flaherty told The Atlanta Journal-Constitution in an email.  The parents of ...
Teen who biked 13 miles to work given car as present by coworkers
Teen who biked 13 miles to work given car as present by coworkers

Noah Robinson rode his bike to work daily.  The 19-year-old made the 13-mile round-trip commute to his job at Glastender in the rain and even as the temperatures began to drop.  That ended Nov. 10, when his coworkers surprised Robinson with a car for his birthday.  "I want everybody to know that I'm really grateful for everything...
More Stories