July 02, 2013
Stafford student loan rate doubles despite House action
The interest rate for US Stafford student loans doubled Monday. The US House of Representatives passed a bill last week that would reduce the increase. The Senate did nothing.
Monday, July 1, Stafford loans go from 3.4% to 6.8%, set by a bill when the Democrats controlled Congress in 2007. The change was supposed to take effect last year, but was delayed one year.
The House passed H.R. 1911 that would set the rate at the 10-year US Treasury bill rate plus 2.5%. It's a good idea to base the rate on a real-world, market interest rate. And they capped the interest rate at 8.5%. Today the 10-year T-bill is 2.33%, so the Stafford loan rate would be 4.83% [corrected].
Is 4.83% too high? Ask your powerful Senators why they did nothing. Oh, they started talking Monday when it was too late. Seattle Times. But why did they sit on their hands last week?
BTW Obama threatened to veto the house bill because...
Posted by Ron Hebron at July 02, 2013
07:55 AM | Email This
It will be a good lesson for the Obama Youth voters. When the government promises you something free in exchange for your vote ... beware.
The Obama Youth will be similarly impressed when their average health care payment goes from $800 a year to $2500 a year in IRS fines or even higher if they elect to pay for expensive Obamacare coverage.
Take from Peter to pay Paul. It is the Obama way.
John Kline, R-Minn. "We want to help students and WE WANT TO GIVE THEM CERTAINTY AND WE WANT THEM NOT TO HAVE TO RELY ON THE WHIMS OF POLITICIANS HERE."
THE GOP PLAN WOULD ALSO RESET THE LOAN RATE FOR ALL BORROWERS EVERY YEAR BASED ON MARKET FLUCTUATIONS, while under Obama's proposal, any borrower's initial loan rate would remain fixed for the life of the loan. The president is also seeking more flexibility for students to repay their loans.
You Republicans speak with a forked tongue.
4. Looks like your student loan didn't do much good for you. 5.83% sounds reasonable until you notice that 2.5% + 2.33% is 4.83%.........I'm guessing once again bureaucracy must be shaving off that other 1%? Is that the cost of government?
5. re 6 -- yeah -- That must be it.
6. Do you remember when student loans were private and rates were set by the market? Now that they are federalized this is what you get. Any time the government is involved this is what you can expect. People with no banking or financial expertise making political decisions. Is it any wonder that nobody likes the results?
To the whiners out there: this was a temporary reduction in the rates sort of like the Bush tax cuts. Sooner or later you have to pay up.
7. Can we pls just get a new president? This one is a complete disaster.