With less than two weeks before Congress goes on its August vacation, many lawmakers and President Obama are rallying around a proposal that could lower interest rates on almost all student loans by pegging the rates to the open market, but several Democrats — including one of Connecticut’s senators — said the potential compromise won’t do enough to help financially strained college students.
Congressman Joe Courtney said that he supports the deal because it would lower rates before classes resume in the fall, and those rates would likely stay low for at least a few years while the economy recovers.
“Everything could always be improved upon,” said Courtney, who represents the eastern part of the state. “We’re not just in overtime here. We’re in ‘sudden death’ overtime, in terms of getting ready to go back to school.”
But Sen. Richard Blumenthal said that, under the proposal, a higher cap on interest rates would hurt students in the long term, luring them into loans they might not be able to afford in the future when rates go up. Here’s what he had to say to his Senate colleagues last night:
The compromise is projected to lower rates on all new government loans for undergraduates to about 3.86 percent. Rates for loans taken out by graduate students and parents would also decrease. That plan is expected to come up for a vote in the Senate sometime this week, perhaps as soon as Wednesday.