The Senate approved a bill that will retroactively lower student loan interest rates, which doubled to 6.8 % on July 1, 2013. The Senate voted 81-18 to pass the bill, known as the Bipartisan Student Loan Certainty Act of 2013. A list of the provisions of the bill follows:
- undergraduate Stafford loans would be offered at 3.86%
- graduate student loans would be offered at 5.4%
- parent PLUS loans would be offered at 6.4%
- graduate loans are fixed at 6.8%
- PLUS loans will carry a rate of 7.9%
Contrary to current law, the legislation would attach interest rates to the market; therefore, the rates would be subject to change yearly. Also, the bill includes interest rate caps for loans for undergraduate students, graduate students and parents, ensuring that the rates cannot rise above 8.25%, 9.5% and 10.5% respectively.
Education Secretary Arne Duncan said that the compromise is a victory for 11 million college students, who, he said, will save roughly $1,500 in interest on each loan. The bill heads to the House for a vote which is likely to happen within the next week. President Obama has indicated that he is likely to sign the bill.