WASHINGTON (5/24/13)--Legislation that would tie student loan interest rates to 10-year U.S. Treasury notes, and allow those student loan rates to reset each year, was passed by the U.S. House on Thursday.
The Smarter Solutions for Students Act (H.R. 1911) passed the House by a 221 to 198 vote.
According to a U.S. House release, H.R. 1911 would:
The bill will now move on to the Senate. The federal student loan rate is currently capped at 3.4%, and this limit will double to 6.8% on July 1 if Congress does not take action.
Other student loan fixes introduced in the House and Senate include:
Sen. Kirsten Gillibrand (D-N.Y.) this week also announced the Federal Student Loan Refinancing Act, which would enable federal student loan holders with interest rates above 4% to refinance those loans at a fixed rate of 4%.
The Credit Union National Association's first annual High School Student Borrowing Survey, released last month, found that nearly half of high school seniors don't know how much they will need for college costs. That lack of knowledge translates to a greater student-debt burden after college.
In a recent meeting with Consumer Financial Protection Bureau officials, CUNA said credit unions could do more to help debt-saddled grads if the maximum credit union student loan maturity of 15 years was increased. (Use the resource link for an April 23 News Now story: CFPB Seeks CU Help For Student Loan Issues.)