President Barack Obama is scheduled to sign a bill on Friday, that will save college students up to $1,500 of interest charges from this year’s student loans.
Interest rates on new Stafford loans doubled to 6.8% from 3.4% on July 1. The rates increased due to Congress being unable to come to a compromise on how to keep rates at the previous 3.4%. The new bill would drop those rates down to 3.9% for undergraduates, 5.4% for graduates and 6.4% for parents. The new loan rates would only last through the 2015 academic year. The rates on these loans can rise, but they are capped at 8.25% for undergraduates, 9.5 % for graduates and 10.5% for parents, reports the Associated Press.
“Even with this important bill signed into law, much work remains to ensure college stays within reach for middle-class families and those striving to get into the middle class,” Jay Carney, a White House spokesman, told the Associated Press.
The government is expected to make $184 billion in profits from students loans over the next decade.
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