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Copyright 2016 NPR. To see more, visit http://www.npr.org/.

Copyright 2016 NPR. To see more, visit http://www.npr.org/.

Copyright 2016 NPR. To see more, visit http://www.npr.org/.

Copyright 2016 NPR. To see more, visit http://www.npr.org/.

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Congress Sends Student Loan Bill To Obama

Aug 1, 2013
Originally published on August 2, 2013 6:01 pm

Transcript

DAVID GREENE, HOST:

It's MORNING EDITION from NPR News. I'm David Greene.

RENEE MONTAGNE, HOST:

And I'm Renee Montagne.

After a long political fight, Congress has passed a compromise on student loans. The bill is now waiting for President's Obama signature, just in time for students entering classes this fall.

As NPR's Ailsa Chang reports, the legislation will lower student interest rates in the short term, but those rates are expected to rise.

AILSA CHANG, BYLINE: The weird thing about this long, protracted battle is that in the end the differences between the sides weren't that monumental. President Obama and the House had similar plans months ago. Senators dickered for a while and then in the end came up with a proposal the House approved overwhelmingly on Wednesday.

UNIDENTIFIED MAN: The yays are 392. The nays are 31.

CHANG: But the whole debate took weeks and weeks. The Senate blew past a July 1 deadline, which ended up doubling interest rates on subsidized loans. And House Republicans had been gloating ever since. Lots of them got in one last dig on Wednesday, like Virginia Foxx of North Carolina.

REPRESENTATIVE VIRGINIA FOXX: As a former teacher, I would say that while the Senate turned in their assignment rather late, it's always better to turn in an assignment, even if it's late.

CHANG: But the Senate still got a passing grade.

So what's the final legislation? Student loan interest rates will now be tied to the 10-year Treasury note. That's the borrowing rate for the government, so it's really low. And it's what House Republicans wanted all along. Here's Eric Cantor, the House majority leader.

REPRESENTATIVE ERIC CANTOR: I'm very, very excited the Senate and the White House finally decided to put politics aside and come down on the side of the students and join us in making sure that student loan interest rates do not escalate.

CHANG: Well, actually, the rates will likely go up. Right now undergrads will see a rate of 3.86 percent. But as the economy improves, that rate will rise. There's a cap at 8.25 percent, but a lot of critics say that cap is too high. At any rate, many lawmakers acknowledge tweaking interest rates isn't going to make or break whether most people can go to college. More reform is needed to make college affordable, they say, and they promise to tackle that issue after summer recess.

Ailsa Chang, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.