Senators Agree To Lower Student Loan Interest Rates, With A Catc - WLNS TV 6 Lansing - Jackson | Your Local News Leader

Senators Agree To Lower Student Loan Interest Rates, With A Catch

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EAST LANSING, Mich. (WLNS) – A group of Senators announced on Thursday they reached a multi-pronged agreement that includes lowering federal student loan interest rates for undergraduates to 3.8 percent starting this fall, and linking future interest rates to the performance of financial markets.

A spokesperson for Democratic Sen. Debbie Stabenow says the future interest rates will be tied to a 10-year-treasury note with an 8.25 percent cap, a deal Stabenow's office says could have an adverse effect on students' financial performance post-graduation.

            "Sen. Stabenow is still reviewing the agreement, but she has serious
            concerns that it could hit students and their families with thousands
            of dollars in additional debt. As currently written, many current students
            would see their rates more than double by the time they reach their senior
            year under this plan."  --Stabenow Spokesperson

Some students are calling the deal ‘bittersweet,' and say it's great that lawmakers are giving temporary relief, but tying the interest rates to financial markets concerns them. "It makes me feel like [they're saying], ‘Hey, we care for a little bit, but if something happens to the market, then we can come back at you and get more money out of you when we know that you're in deep debt and you're trying to start your career and family," says Gibron Lockhart, student at Michigan State University.

The move to lower student loan interest rates comes after those rates doubled from 3.4 to 6.8 percent on July 1.

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