UNDATED (WRN) The U.S. Senate approved a compromise Wednesday that will dial back student loan rates for the upcoming school year. However, the head of one consumer advocacy group says it will still make college more expensive for students who need to borrow money.
The bill lowers rates on federally-subsidized Stafford loans for undergraduate students to 3.86 percent. While that is a reduction from the 6.8 percent rates climbed to when they doubled earlier this month, Bruce Speight with the Wisconsin Public Interest Research Group says it could add tens of thousands of dollars to the cost of a college education for many students. Speight says the fact that the bill also ties future rate increases to government borrowing costs should be a major concern, since that could cause rates to skyrocket down the road.
Speight says any increase in the rate leads to a higher debt burden for students, which is the opposite of what lawmakers should be doing. He says “we can keep higher education affordable and not burden our students with…insurmountable debt that they are paying off for decades.”
Wisconsin’s U.S. Senators split their votes on the deal, with Republican Ron Johnson supporting the measure and Democrat Tammy Baldwin voting against it. The bill now heads to the U.S. House.