Student loan interest rate deal does little to help low-income students

Kylie Lacey's picture

Regardless of whether Congress can pass legislation to address the rise in interest rates on federally subsidized student loans, it will be small consolation for those college students who are homeless or unable to afford food.

Following weeks of heated rhetoric surrounding the doubling of interest rates to 6.8 percent on subsidized Stafford loans, a bipartisan bill passed the House last week. The White House-endorsed deal ties interest rates to financial markets, allowing undergraduate students to borrow at 3.9 percent interest for the 2013-14 school year, though the rate may climb in the future.

"The student loan interest rate debate has really been about ameliorating a small symptom of a much larger disease," said Michael Dannenberg, director of higher education policy at the Education Trust. "And the disease is that college costs too damn much."

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