The thorny, prolonged issue of student loan rates guaranteed by the federal government could be resolved soon as Congress seeks to leave town for its August recess with accomplishments in hand.
The Hill, a political daily newspaper in Washington, and other political journals, reported Thursday that Senate negotiators have reached a bipartisan deal that would lower rates but eventually allow them to rise higher than rates prevailing when an old agreement expired July 1.
The House adopted a similar “market based” plan earlier.
For the coming school year, undergraduates would see rates of 3.86 percent, lower than the current fixed rate of 6.8 percent, but the new rate could go as high as 8.25 percent in future years, Capitol and Washington publications reported.
About 7.4 million American students, including many in Mississippi, would be affected by a loan agreement or the lack of one.
Sen. Thad Cochran, R-Miss., among others, supports the idea.
“I look forward to the Senate considering the pending bipartisan agreement that will provide more certainty and stability for students who rely on student loans. Their ability to obtain this financial assistance is important, as is the need to ensure that the program is fiscally responsible,” he said in a statement issued Thursday.
Sen. Roger Wicker, R-Miss., is a backer, “This permanent market-based solution would remove Washington from the business of arbitrarily fixing student loan rates. I’m proud to support this bipartisan legislation to provide students with long-term certainty as they battle the mounting costs of education.”
On July 1, rates doubled from 3.4 percent to 6.8 percent when Congress could not reach an accord on how to address the loan rates.
Rates on undergraduate loans could only climb to 8.25 percent under that agreed upon framework, according to an aide familiar with the talks, cited in one report.
Many students need to sign loan contracts in coming weeks before the fall 2013 semester begins at universities and colleges nationwide.
Knowing the range of interests costs to expect would allow students and parents to calculate both loan amounts more precisely and their paybacks once they enter the workplace. The agreement is important for the nation’s intellectual capital.