The U.S. Congress reached an agreement to keep the interest rate for subsidized Stafford Loans for undergraduates at 3.4%, instead of the 6.8% interest rate that was supposed to take effect on July 1, 2012, by passing a one-year extension on the current discounted rate. The U.S. House of Representatives voted 373 to 52 and the U.S. Senate voted 74 to 19 in favor of the bill. The provision was packaged into a transportation bill. Upon passage, President Obama quickly signed the bill into law.
The American Student Dental Association lobbied for the 3.4% cap on federal loans during the National Dental Student Lobby Days on April 16 and 17, 2012, based on the fact that the level of educational debt plays a major role in postgraduate career planning. Dental students may have undergraduate debt as well.
The legislation will retain an interest rate of 3.4% on all new subsidized student loans until June 30, 2013, and will change the interest the federal government plays on behalf of some borrowers who are attending school, according to a Congressional Budget Office cost estimate for the bill, which was posted on the website of the U.S. House of Representative’s Rules Committee.