With Congress back at work for a few weeks before their August break, student loan interest rates are the talk of D.C.
Rates on new government-subsidized loans doubled to 6.8 percent on July 1. Republicans and Democrats both say that\’s a bad thing, but they disagree on how to fix it.Democrats have put together several plans to retroactively extend the old interest rate of 3.4 percent until at least next summer and at least one senator says they could vote on an extension later today.
House Republicans have been forcefully calling on the Senate to approve their plan, which would peg student loans to market interest rates. In this video, Speaker John Boehner steps up to the mic around the 3:40 mark:
Reid and others in the Senate say that the Republican plan could actually generate higher loan bills for students because interest rates are expected to rise as the economy recovers: