Boston schools back Warren’s proposal to stall student loan interest rate increases

Thursday, May 30, 2013

As the deadline nears for the potential inflation of student loan interest rates, Congress can’t seem to agree on the best approach to help incoming students manage their money while pursuing a college education. But dozens of Boston area schools have stepped up in support of a proposal put on the table by Sen. Elizabeth Warren which would essentially stop interest rates for students to borrow from doubling, and set the rates equal to those given to large financial institutions like banks.

Starting July 1, student loan interest rates are set to jump from 3.4 to 6.8 percent, something Warren has called a “threat” to economic recovery efforts. Warren’s proposal, called the “Bank on Students Loan Fairness Act,” would allow students to borrow funds at the same low rates as banks do from the Federal Reserve, roughly 0.75 percent, for one year, giving Congress enough time to figure out “a fair, long-term solution on student loan interest rates.” The act is co-sponsored by Congressman John Tierney.

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