Senate bill passed for market rate based, student loan, interest rates

Student loansThere have been some heated debates in Congress, as Senators currently debate a change to the Student Loan repayment system. Any changes to Student Loans are very sensitive, in fact the whole subject creates flaired tempers.

The Senate has been in dispute since July 1st, when they could not agree and interest rates on the loans doubled. There has been a lot of pressure on Congress to sort this situation out. What has now the situation for students is that their Student Loan, will now be tied to the financial markets and whatever situation prevails there, will determine what the interest rates are.

The bill was passed by a vote of 81 to 18 in favour, due to strong support from the Republicans. There were of the 18 votes against, 17 were a very clear no to the introduction of this change to how much students will pay for their education. The bill was also attacked for, in effect making students create profits for the US Government.

The Government obviously benefits if the markets cause the interest rate to go up. It was also pointed out by those against the bill that even though there is a Democratic President and a Democrat controlled Senate, the bill being produced is basically a Republican piece of legislation. Congress members have said that they are under pressure with deadlines and the Student loan situation was something that they urgently needed to resolve as it has been in limbo.

The new rates would be applied to all student loans taken out since July 1st.

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