Blumenthal Not Backing Loan Deal

by Categorized: Richard Blumenthal, Washington Date:

U.S. Sen. Richard Blumenthal is not endorsing a new Senate compromise that would hold down interest rates on federally backed student loans but then link them to market rates. Under the deal loan rates for students taking out loans in future years could rise to as much as 8.25 percent.

\"blumenthalUSA Today is reporting that for the coming school year, the loan rate would be set at 3.86 percent before substantial increases in future years.

Previous Stafford Loans were capped at 3.4 percent, a rate that doubled to 6.8 percent for students taking out loans this fall when Congress failed to to intervene on July 1.

Blumenthal said he may propose an amendment when the Senate takes up the proposal, perhaps as soon as next week:

I am opposed to it at least right now — it has a variable rate that could balloon the level of payments out of control.  The cap at 8.25 percent is way too high in my view. I\’m considering amendments that would reduce the cap.

The Courant is using Facebook comments on stories. To comment on courant.com articles, sign into Facebook and enter your comment in the field below. Comments will appear in your Facebook News Feed unless you choose otherwise. To report spam or abuse, click the X next to the comment. For guidelines on commenting, click here.

One thought on “Blumenthal Not Backing Loan Deal

  1. enness

    “Under the deal loan rates for students taking out loans in future years could rise to as much as 8.25 percent.”

    The operative word here is ‘could’ — that doesn’t mean ‘will.’ If loans had been tied to market rates in past years, they would have been lower than they have been. Remember that when they insist that they have your best interest at heart.

Comments are closed.