Congress Votes To Keep Student Loan Interest At 3.4 Percent
The bill, which sets aside funding for highway projects to salvage 2.8 million jobs, would also extend the 3.4 percent student loan rate for one more year, just two days before it would have doubled, CBS News reported. In a bipartisan deal, the measure passed on a 373-52 vote in the House and a 74-19 vote in the Senate.
Outstanding educational debt reached $1 trillion earlier this year as Congress has been debating solutions on how to keep rates low and help graduates make repayments during a sluggish job market. An increase in the interest rate of subsidized loans would have affected more than 7.4 million students, who would accrue an extra $1,000 in debt per year without action from Congress, according to Bloomberg.
Education Secretary Arne Duncan told Bloomberg Television before the vote that holding the rate at 3.4 percent provides a temporary fix for the "urgent crisis," but a long-term solution is still needed.
Although Congress voted to keep the interest rate stable, starting July 1, the six-month grace period after a student finishes school will be eliminated. The change applies to loans issued through July 2014, The Washington Post reported. Students pursing graduate degrees will become responsible for paying interest on their loans while they are in school and immediately after leaving college.
On the transportation front, Congress secured funding for the construction of highways, bridges and other transportation projects for two years in every state and congressional district. But both parties had to make concessions on some key issues, according to CNN:
Republicans dropped language that would have approved the Keystone XL pipeline and prevented the Environmental Protection Agency from regulating harmful coal ash waste from power plants.
Democrats were forced to accept GOP demands to streamline and speed up the federal review process of construction projects.
More from CBS News:
The bill consolidates transportation programs and reduces the number of programs by two-thirds. It also revamps rules on environmental studies of the potential impact of highway projects, with an aim toward cutting in half the time it takes to complete construction projects. And the measure contains an array of safety initiatives, including requirements that would make it more likely passengers would survive a tour bus crash.
The highway funding/student loan bill now goes to President Barack Obama for final approval.
See more of Neon Tommy's coverage on student loans here.