Last week, Senators came to an agreement on a student loan package that would cap interest rates. The deal will be voted on later this week.
Interest rates will be tied to financial markets, meaning that the rates could climb beyond those currently in place. But they will only be able to rise to certain levels: 8.25 percent for undergraduates and 9.5 percent for graduate students.
“This is an important starting point,” affirmed Education Secretary Arne Duncan, in a conference call with reporters yesterday. “But by no means does this law start to make college in a really substantial way much more affordable for American middle class families, which I think our collective goal has to be.”
Because of Congressional inaction, student loan interest rates doubled in July from 3.4 to 6.8 percent.
The deal would drop loan rates to 3.85 percent for undergrads for next year, and then the rate would be tied to the 10-year Treasury note.
Senator Tom Coburn (R-OK) is part of the bipartisan group of Senators that support the bill. He joins The Takeaway to discuss the details of the bill.
Stay up to date with The Takeaway–become a Facebook fan & follow us on Twitter!