Obama’s Student Loan Bill Won’t Actually Help Most Students
Fiscal Times — Despite all the political hubbub and posturing over federal student loans, the benefits to students and their families would be relatively modest compared to the legislation’s substantial price tag. Only 3 percent of the roughly $1 trillion of overall outstanding student debt will carry the low interest rate extension this year.
President Obama won kudos on college campuses and from young voters earlier this year by vigorously pressing Congress to block the scheduled rate increase on highly subsidized Stafford loans from 3.4 percent to 6.8 percent. Since then, presumptive presidential nominee Mitt Romney and congressional Republican and Democratic leaders have all endorsed proposals for preserving the lower rate for an estimated 7 million students and their parents.
However, the two parties have dickered over how to offset the roughly $6 billion it would cost to preserve the lower rate for another year, and are racing to hammer out a compromise before a weekend deadline.