Enlarge
Digital Vision
College students have reason to smile -- legislation preventing a doubling in federal student loan rates is headed for President Barack Obama's signature.
The House sent President Barack Obama legislation that prevents interest rates on new federal student loans from doubling.
The bill, which already has been approved by the Senate, passed by a 392-31 vote Wednesday evening in the House.. Under the bill, federal student loans rates will be tied to the yield on 10-year Treasury notes. That means undergraduates will pay an interest rate of 3.86 percent on loans taken out this year.
Without action by Congress, undergraduates would face a 6.8 percent interest rate on federal student loans this year, double last year's rate.
"The surest way to get ahead is through access to higher education, and today the House acted once again to ensure working middle-class families can realize that goal," said House Majority Leader Eric Cantor, R-Va.
"This permanent, market-based plan ends the annual game of Congress playing politics with student loan interest rates at the expense of students planning their futures," said Sen. Lamar Alexander, R-Tenn.
Obama endorsed the legislation, so he is expected to sign it into law soon.
But some Democrats indicated they plan to push for changes in the new student loan formula in the future.
"The 'fix' in the plan means interest rates on student loans could reach 8.5 percent in the next five years," said Rep. Keith Ellison, D-Minn.
