The financially and emotionally depressing student loan debate has hit yet another snag.
A bipartisan committee in the Senate was at work trying to scale back the drastic interest hikes on student loans (which are skyrocketing to 6.8 percent), but the nonpartisan Congress Budget Office made it a no go. What happened?
The CBO says that any measures taken need to be revenue neutral–meaning the government still needs to collect the same amount of cash even if the tax laws change, and those funds have to come from somewhere.
CNN reports that the Senate is waiting on a full CBO report before anyone moves anything any further, but the Democrats and Republicans have different strategies for dealing with the debt. Republicans are searching for a deal that won’t further dig the country into its deficit, while Democrats are trying to make sure the government doesn’t wind up profiting off of students who simply graduated at a really bad time and in a crummy economic climate.
The White House has been a bit vague on their own plans to help, but Jay Carney did offer, “We’re working with the Senate, with members of both parties. We’re working with leaders in the House as well on this issue to get this done.” So that’s comforting, right?
How does this affect you? Even if you already graduated, if you were considering–or are in–grad school, your rates will be at about 3.4 percent if you sign(ed) any paperwork after July 1. The new deal (not to be confused with the New Deal, history buffs) would essentially tie student loan interest rates to market rates; Senate wants to cap the interest rates at 8.25 percent for undergrads and 9.25 percent for graduate students.
That’s still a lot–but it could be a lot worse. They could take the shirt off your back. Or the pants off your bottom. (I wouldn’t mind the last part.)