Wednesday, July 24, 2013 at 4:34 PM
As Congress continues debating how to stabilize interest rates for new federal student loans, one Democratic lawmaker from Ohio says he’s not on board with the senate’s latest compromise plan.
After the loan rates doubled to a fixed 6.8 percent on July 1, a bipartisan group of senators proposed a plan that would tie the rates to the market instead. The rate would drop to 3.9 percent for undergrads in the short term, but are expected to rise as the economy improves. A cap would prevent the rate from rising above 8.25 percent. The rate and cap would be higher for graduate students.
Senator Sherrod Brown says he’s against the deal because it allows the government to profit too much from students.
Brown: “The government will make, we estimate, about $175 million under this legislation and that just doesn’t make sense that the government should be making money off students.”
Brown says that 175 million is on top of what the government already takes in from student loans.
The Senate is slated to vote on the compromise deal sometime this week.