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Student loans rates decrease
A bipartisan compromise on student loan rates heads to the house for final vote after being overwhelmingly approved by the senate.
College students and their parents can breathe a sigh of relief. Yesterday the senate agreed to a compromise to end a dispute over interest rates on education loans.
Because of a standoff in Congress, those rates doubled on July 1 to 6.8 percent.
But under this deal rates will drop down to 3.86 percent for this upcoming year.
That sigh of relief may just be temporary.
The Senate compromise links interest rates to financial markets. So the good news - lower rates right away. But they could potentially increase as the economy improves and that uncertainty came from democrats
Seventeen of the 18 no votes came from democrats who said the plan leaves students vulnerable to market fluctuations.
"It's not the best we can do with respect to students and families."
Now, that's the same thing credit card companies said when they sold zero-interest credit cards, and it's the same thing prime -- sub prime mortgage lenders said what they sold teaser-rate mortgages. In all these cases, the
bill comes due.
Democrats insisted on and secured a measure that would ensure undergraduate loans won't be allowed to rise past 8.25 percent and graduate loans past 9.5 percent.
President Obama called the deal a major victory for American students. The bill is expected to pass the house soon and head to the president's desk for his signature