SPRINGFIELD, Mass. (WWLP) - On Monday, interest rates are expected to double on federal student loans--that is unless lawmakers can work out a deal.
A group of Senate Democrats have just announced a plan that would maintain the current interest rate on new federal student loans for one year. This plan would pay for the extension of 3.4% rates, by cutting a break on tax-deferred retirement accounts.
Meantime, Massachusetts Senator Elizabeth Warren is speaking out against the upcoming deadline. She said the government should not make money from students. "But this is also a moral question. The United States government should be investing in our students, not charging them. Profits for getting an education. That's what this is about", Warren stated.
The chairman of the Senate education panel said none of the proposals that are circulating among lawmakers could pass. He urged Congress to extend the current rates for another year when they return from their July 4th recess.
Roughly 7 million college students are taking subsidized Stafford loans out this year. If you or your child have already taken out a federa loan, the approcahing rate hike would not apply to you. It only applies to loans that are taken out after Monday, July 1st.