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Sen. King on Rolling Back Student Loan Rates: “Now’s the Time to Do It”

July 16, 2013 in Yahoo! Finance

by Justin Maiman

After much hope and fanfare last week, the student loan bill has failed in the Senate. As of July 1, certain Stafford loan interest rates doubled to 6.8%. This increase will cost students and their families up to $4,500 extra over the life of these particular loans, according to a Congressional Joint Economic Committee Report.

Senator Angus King (I-Me.) tells The Daily Ticker that negotiations continue as Congress scrambles to reach a deal. “The numbers are being run to see how it all works out to try to ensure it’s budget neutral.” King wants a long-term solution, not another one-year extension: “Let’s come up with a solution and get out of this cycle.”

Meanwhile, Bloomberg Businessweek has an interesting piece on alternative proposals to “overhaul” student loans. Here’s the top four:

  • Tie Loan Payments to Income
  • Tie Loan Limits to Courses of Study
  • Give Loans Directly to Universities & Let Them Reduce Tuition
  • Expand Pell Grants

As Congress tries to agree on just one way to lower costs for students, Aaron Smith, executive director of the Young Invincibles, tells The Daily Ticker: “We are hopeful that there will be a proposal that will not be more expensive for students in just a few years, one that does not pay down the deficit on the backs of students. We hope that those involved in negotiations continue to keep students in mind as they work to come up with a solution.”

The clock is ticking…