Congress voted today to freeze interest rates on federally subsidized student loans. The interest rates, which were scheduled to jump to 6.8% this Sunday will remain at 3.4% for the next academic year. The votes were as follows: 373 to 52 in the House; 74 to 19 in the Senate.
Thanks to the bill 7 million students will save an average of $1000 on their loans this year. The bill also introduces a bit more discipline for students by capping loan periods to 150 percent of the length of the program enrolled in. This means that student borrowers will only have six short years to complete a four year degree.
The decision not to increase student loan interest rates will cost the government $6 billion dollars. They will cover this cost by increasing premiums on federal pension insurance.
Forgive me for sounding disenchanted by what some are calling the ‘biggest economic achievement’ by lawmakers ahead of the elections. To me this is not something to be pumped about. I’m not pleased that one of the few bipartisan efforts that politicians have made this year is to an end of keeping my generation blind to the economic realities that they will have to face.