News Summary: House OKs student loan-market link

News Summary: House backs student loan rates linked to financial markets despite a veto threat

Associated Press

VETO THREAT: House lawmakers approved legislation that links student loan rates to the ups and downs of the financial markets despite opposition from Democrats and a veto threat from President Barack Obama.

DEADLINE LOOMS: Interest rates on new subsidized Stafford loans are set to double, from 3.4 percent to 6.8 percent, on July 1. Lawmakers from both parties say they want to avoid the increase.

ANNUAL RESET: Under the GOP proposal, student loans would be reset every year, pegged to 10-year Treasury notes with added percentage points. The bill would cap subsidized loan rates at 8.5 percent, and 10.5 percent for parents and graduate students. The rates are currently 3.4 percent and 7.9 percent, respectively.

View Comments (1)