A bipartisan student loan bill was signed by President Barack Obama on Friday. The legislation came after months of conflict and will help students keep from paying double the interest rate they did last year.
The legislation is a rare compromise for the current Congress, which struggled for months to come to an agreement. Its main goal is to make sure interest rates on federal student loans this fall don’t double to 6.8 percent.
Obama signed the bill with lawmakers and student advocates standing nearby, reports CBS News. The president praised Congress during the signing, calling the bill “a sensible common sense approach” to making sure student loan interest rates stay at a reasonable level.
The bill was stalled largely because Democrats and Republicans couldn’t agree on whether or not they should tie interest rates to the market. While Republicans wanted to make them variable, Democrats fought for a fixed rate.
But after they failed to come to an agreement by July 1, the student loan interest rates doubled from 3.4 percent to 6.8 percent. But the bill signed on Friday changes that number to 3.9 percent for undergraduates. It will take effect retroactively, so any students who obtained loans between July 1 and August 9 can get the lower rate.
After months of failed talks, the Senate was able to come up with the bipartisan legislation, notes NBC News. Senator Angus King (I-ME), who helped write the bill, commented that it will offer “a long-term, market-based solution that lowers and caps interest rates for all students taking out a loan.”
But the compromise bill wasn’t praised by everyone. Senator Elizabeth Warren (D-MA) commented that the final bill was “obscene.” She went on to liken it to “the same thing the credit card companies said when they sold zero-interest credit cards.” This is because, even with the newly-signed student loan bill, interest rates for loans will go up in the next few years.
While the student loan bill was a victory, President Obama commented after signing that there is more work to be done. He pointed to the high cost of college as another hurdle that keeps college students from staying in school.
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