Senate Delays Student Loan Interest Rate Hike
Posted on June 27th, 2012
Inside Higher Ed reported today that the Senate has agreed to keep the interest rate on federally subsidized student loans at 3.4 percent for another year. The rate was set to double in less than a week. The interest rate extension will cost the government $6 billion, which will be paid for in part by changing eligibility rules for subsidized loans. Specifically, about $1.2 billion will be saved by limiting loan eligibility to 150 percent of a program's time to degree. Students pursuing a bachelor's degree would become ineligible after six years, and those pursuing an associate degree would become ineligible after three years. It's unclear how many students will be affected by the change in eligibility rules.