House Votes to Cut Student Loan Rates
WASHINGTON – The House overwhelmingly approved a bill Wednesday that would cut the interest rate on many student loans in half, putting even more pressure on the dwindling number of credit unions that continue to make student loans. The legislation would lower the rate from 6.8% to 3.4% in stages over five years for need-based loans. The proposal would cost about $6 billion and affect nearly 5.5 million students who get the subsidized loans each year. The $6 billion would be raised by reducing the government's guaranteed return to lenders who make student loans, cutting back the amount the government pays for defaulted loans and requiring lenders to pay more in fees.