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Congress Votes to Freeze Student Loan Interest Rates

By Catherine Groux
Posted July 02, 2012 02:04 PM

Today, Congress voted to freeze student loan interest rates.
Today, Congress voted to freeze student loan interest rates.
Today, Congress voted to freeze student loan interest rates at 3.4% for another year, CNN Money reports. Without the passage of the bill, student loans were set to double on July 1.

President Barack Obama brought the issue to light in April during his weekly address, when he called on Congress to act before more than 7.4 million college students would be forced to pay an average of $1,000 more on their student loans.

While the freezing of student loan interest rates was largely approved by both Republicans and Democrats, controversy emerged over how the government would finance the $6 billion needed to keep interest rates low. Ultimately, on the heels of their July 1 deadline, lawmakers decided the money would be funded through changes to how companies fund pension programs. Additionally, the new bill states that associate's and bachelor's degree seekers can only attend school for six years without accruing interest on their student loans.

"Congress listened to students and their families and delivered a bill that stops student loan interest rates from doubling," Rich Williams, a higher education advocate with U.S. Public Interest Research Group, told CNN. "Today's victory is another important step in getting rising student loan debt under control."

The new student loan bill also includes plans to maintain aid for highway and transit construction, which could save an estimated 1.8 million jobs, The Associated Press reports. Currently, the legislation is making its way to Obama's desk where it will need to be signed.

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