<p>Here is the latest info on the Senate bill that passed yesterday. It is expected to pass in the House and thus become law; it will be retroactive to July 1, 2013:</p>
<p>The deal reached in the Senate marks a long-awaited compromise by Senate Republicans, Democrats, and the Obama Administration. Under the act interest rates would be based on the 10-year Treasury bill plus the following percentage add-ons:</p>
<p> 2.05 percent for undergraduate Stafford (subsidized and unsubsidized)</p>
<p> 3.6 percent for graduate Stafford</p>
<p> 4.6 percent for PLUS (parents and graduate students)</p>
<p>In addition, the deal includes caps: 8.25 percent for undergraduate Stafford; 9.5 percent for graduate Stafford; and 10.5 percent for PLUS. Loans would be variable-fixed, meaning students would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan.</p>
<p>My feeling is that there will be backlash on the rates once interest rates begin to rise again (which they most certainly will do). IMO, this will last only as long as low interest rates last. Then we’ll be revisiting the topic once again.</p>