Irvine, CA -- (SBWIRE) -- 09/10/2013 -- President Barack Obama signed into law Friday a measure restoring lower interest rates for student loans, pledging the hard-fought compromise would be just the first step in a broader, concerted fight to rein in the costs of a college education.
Both parties were praised for finally taking a sensible and reasonable approach to the student loan rate issue. Obama went on to say, “our job is not done.”
But even the feel-good moment at the White House came with reminders of the bitter partisanship that still makes future deals incredibly difficult for Obama.
The rare compromise emerged only after a frenzy of summer negotiations, with lawmakers at odds over how loan rates should be set in the future even while they agreed that a doubling of rates – it kicked in July 1 when Congress failed to act before the deadline – would be bad policy and bad news for students.
The legislation links student loan interest rates to the financial markets. It offers lower rates this fall because the government can borrow money cheaply at this time. If the economy improves in the coming years as expected, it will become more costly for the government to borrow money, and that cost would be passed on to students.
About 11 million students this year are expected to have lower interest rates, saving the average undergraduate $1,500 on interest charges on this year's loans.
Many students and former students have turned to student loan consolidation companies to help see the true benefit of this new law. Student Zoom is continuing to educate and help any way it can.
By Jason Nichols
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