WASHINGTON — The Senate’s top Democrat and Republican said Tuesday that they have reached a deal that would prevent interest rates on college loans from doubling this weekend for millions of students. But House Speaker John Boehner, R-Ohio, has yet to decide whether the pact will be acceptable to his Republican-run chamber.
The agreement, if approved by Congress, would spell an end to one of this election-season’s higher profile conflicts between President Barack Obama and congressional Republicans.
“The president’s been largely uninvolved in that, but Senator Reid and I have an understanding that we think will be acceptable to the House,” Senate Minority Leader Mitch McConnell, R-Ky., told reporters.
“We basically have the student-loan issue worked out,” Senate Majority Leader Harry Reid, D-Nev., said separately.
Under the agreement, interest rates for new subsidized Stafford loans would remain at 3.4 percent through next June 30. Without congressional action, interest rates on the loans would double to 6.8 percent for new loans beginning July 1, this Sunday, for 7.4 million students the government estimates would get such loans over the next year. That increase, should it occur, would not affect loans currently held by students.
About three-fourths of the bill’s $6 billion cost would come from Democratic proposals to boost the fees companies must pay to have their pensions insured by the quasi-government Pension Benefit Guaranty Corp., and to change how companies compute the money they must set aside to fund their pensions. The remaining funds would come from a GOP plan to limit federal subsidies for Stafford loans for undergraduates to six years. Currently, the government charges no interest while students are still in school, even if it takes them longer than six years to graduate.
