Senate Reaches Deal to Freeze Student Loan Rates

7M students could save as rates stay at 3.4%
By Matt Cantor,  Newser User
Posted Jun 26, 2012 4:51 PM CDT
Senate Majority Leader Harry Reid speaks to reporters in this file photo.   (AP Photo/J. Scott Applewhite)

(Newser) – Student loan rates will stay at 3.4% for another year, thanks to a Senate deal on the issue, insiders tell the Washington Post. With President Obama and Mitt Romney both pushing for the freeze—which prevents rates from jumping to 6.8% July 1—the agreement is no surprise, the Post notes. There's still a few legislative logistics to be hammered out, but both Harry Reid and Mitch McConnell have signed off on the framework. Equally important, McConnell said he thinks it "will be acceptable to the House."

Disagreements over the plan, which could benefit 7 million students, centered on how to cover its $6 billion tab. The Senate has accepted Reid's suggestion that it be paid for with higher federal pension insurance premiums. To satisfy businesses, lawmakers will alter rules on firms' pension contributions. At Republicans' behest, part-time students will face limits on eligibility.

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