WASHINGTON, D.C. — The United States Senate plans to vote on Wednesday, on a plan that would bring interest rates on federal subsidized student loans back down to 3.4 percent.
The rate doubled last week after the Senate failed to agree on a plan before the July 1 deadline. A new plan, if approved, would retroactively bring the rate from 6.8 percent back down to 3.4 percent.
Negotiators are stuck largely on the issue of whether or not to require a cap on interest rates for new loans. Top Senate Democrats want a cap in place to protect students if rates spike. But President Obama and congressional Republicans want the interest rate tied to 10-year treasury bond rates.
The recent hike affects about 7 million new subsidized Stafford loans for students, but does not apply to existing loans.
