Fed loans best option, even at twice the price
18.05.12
If, by July 1, Congress doesn't renew the rate on new Stafford loans for another year, it will automatically climb to 6.8%, causing interest expense to rise by about $1,000 a year, on average, for the 7.4 million students who typically take out these loans every year, according to the White House.
Although Democrats and Republicans agree on extending the lower rate, they disagree on where to find the $6 billion needed to pay for it.
In the Senate last week, Republicans blocked efforts to continue debate on a Democratic bill that would fund extension of the 3.4% loan rate by closing what supporters called a “loophole” that allows certain S corporations to avoid paying some Social Security and Medicare taxes.
Source: InvestmentNews