Subsidized Stafford loan rate still up in the air
The California Aggie – On May 24, the United States Senate rejected the opposing Democratic and Republican plans to extend the July 1 doubling of the current subsidized Stafford loan interest rate from 3.4 percent to 6.8 percent.
In 2007, former President George W. Bush signed a bill that reduced the subsidized Stafford loan interest rate to 3.4 percent. At its expiration on July 1, it will be restored to the same rate as the unsubsidized Stafford loan interest rate of 6.8 percent.
Senators voted 62-34 against the GOP plan and 51-43 against the Democratic plan. Each plan would have needed at least 60 votes to pass.
The rejected GOP and Democratic proposals, respectively named the Interest Rate Reduction Act (H.R. 4628) and the Stop the Student Loan Interest Rate Hike Act of 2012 (S. 2343), would have pushed the doubling to July 1, 2013 at a cost of $6 billion each. However, each party was split against each other’s method of paying for the bill.
The Stop the Student Loan Interest Rate Hike Act is legislation that would be fully paid for by eliminating the tax loophole that the watchdog agency, the Government Accountability Office, has determined is a problem that allows some privately held companies and professional businesses to avoid paying their fair share of Social Security and Medicare payroll taxes, said Sen. Brown’s Press Secretary Allison Preiss.
