On Wednesday, nearly a month after federal student loan rates doubled, the Senate passed a bipartisan measure giving potential financial relief to future college students.
To sum up: It’s good news…with a catch.
The proposed bill passed 81 votes to 18 and included “yes” votes from Senators Mark Pryor (D) and John Boozman (R). The measure would tie interest rates on federal student loans to the financial markets, thus lowering rates over the next few years.
The catch? Rates could soon begin to climb if the economy continues to improve as many experts expect to happen. Nonetheless, both Pryor and Boozman agreed that this was the right step to take, with Boozman calling the deal “a smart compromise” between both parties.
“It’s taken awhile, and that’s not all bad,” said Boozman in a statement released after Wednesday’s vote. “It’s helped ensure we do the right thing, instead of rushing to just do something that ends up causing more harm than help in the end.”
“I am pleased that we were able to come to a commonsense agreement that addresses this issue well beyond the one-year extension previously proposed while lowering the rate for 100 percent of students next year and saving taxpayers money,” he added.
According to figures from the Congressional Budget Office, tying the current system to a market-based rate will save taxpayers $715 million over ten years.
Pryor, while echoing similar sentiments, was more pointed in his comments.
“Unlike a plan touted by some in the House, this plan locks interest rates in over the life of the loan to reduce uncertainty and help students plan for their future,” Pryor said. “A vote against this bill would be a vote against our students and our future.”
Representative Tom Cotton (R), who many believe will run against Pryor in 2014, voted against a similar bill in the House back in May, saying he believes that college costs are artificially inflated by government-subsidized student loans.
The House is expected to vote on the Senate’s bill before the August recess.