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Senate passes student loan interest rate bill

By 69 News, (follow: @69news), news@wfmz.com
Published On: Jul 24 2013 08:18:09 PM CDT
Updated On: Jul 25 2013 05:29:15 AM CDT
Capitol

Alison Harding/CNN

WASHINGTON, D.C. -

Twenty-something and deep, deep in debt.

Unfortunately, this seems to be the common description of most college undergraduates and graduates.

However, there is some light at the end of the tunnel.

Wednesday, the Senate approved a bipartisan deal that promises lower interest rates for students this fall.

Voting 81 to 18, the Senate declared that students taking out government subsidized and unsubsidized loans will  now have an interest rate of 3.86% as apposed to the 6.8% that was activated on July 1st.

The new rate is retroactive and will apply to loans taken out after July 1st.

This is great news for the 7.4 million college students affected but there are provisions in the bill for rates to go higher in the coming years.

The bill also does not apply to any private student loans, only government Stafford loans.

Both Democrats and Republicans agree that this is a good and much needed step toward stemming the rising cost of education.

President Obama commented, "This compromise is a major victory for our nation's students."

Also agreeing with the new bill and touching on the needs of the future was Congressmen Mike Fitzpatrick saying, "The sooner we fix this, the sooner we can begin addressing the issue of skyrocketing education costs across the country- something I look forward to working on with members of both parties."

Student loans are second only to mortgages, as the largest debt that consumers carry.

As of 2011, the average student owed $27,000 in loans.