Last night, the House approved the Bipartisan Student Loan Certainty Act (HR 1911). This bill:
- Sets the annual interest rate on Direct Stafford loans and Direct Unsubsidized Stafford loans issued to undergraduate students at the rate on high-yield 10-year Treasury notes plus 2.05%, but caps that rate at 8.25%;
- Sets the annual interest rate on Direct Unsubsidized Stafford loans issued to graduate or professional students at the rate on high-yield 10-year Treasury notes plus 3.6%, but caps that rate at 9.5%, and;
- Sets the annual interest rate on Direct PLUS loans at the rate on high-yield 10-year Treasury notes plus 4.6%, but caps that rate at 10.5%.
The President is expected to sign the bill.
HR 1911 is in response to the recent increase in student loan rates from 3.4 percent up to 6.8 percent. Congress calls the bill a compromise but not a perfect solution to rising interest rates. The UW hopes that Congress will revisit this issue when they take up the Higher Education Act later this year.