Though the student loan bill that would keep federal Stafford loan interest rates at 3.4 percent for another year is still awaiting approval from the House of Representatives, news of the U.S. Senate’s recent agreement on the bill has garnered positive reactions from the Berkeley community.
Due to concerns of the Democratic and Republican parties regarding how to pay off the $6 billion cost of the Stop the Rate Hike Act of 2012, the bill had difficulty making its way through the Senate.
Under the current arrangement, the $6 billion would come from increasing the fees paid by employers to insure their pensions to employees, limiting federal subsidies of Stafford loans for undergraduates to six years and changing how companies calculate their pension liabilities, according to the Center for American Progress.
“I’m very pleased that they were able to reach this agreement. I’m sure the millions of students with these loans are pleased too. Hopefully, the House passes this (deal),” said campus CalPIRG Treasurer Spencer Pritchard, who has Stafford loans. “It’s good that (Congress) is working to make higher education cheaper and to help people like me who need to take out loans.”
The university also fully supports extension of the current interest rates on Stafford student loans, according to UC spokesperson Dianne Klein.
“For current UC students, they will pay their loans back based on the rate that was in place when they signed for the loan,” Klein said in an email. “If Congress does not act, the rate for current (and entering) UC students who take out new subsidized Stafford Student Loans on or after July 1st will be 6.8%.”
Between 2010-2011, over 7,900 UC Berkeley students like Pritchard had taken out Stafford loans as well, according to campus spokesperson Janet Gilmore. If the bill is passed, students with the loans will save an average of $1,206 per loan, according to the White House website.
Pritchard said this is a hard-fought victory for CalPIRG, a campus organization that held campus events, spoke to national reporters, attended press conferences and even participated in a conference call with President Barack Obama in their campaign to keep interest rates low.
“CalPIRG was the leading group on the ground concerning the issue of Stafford loan interest rates. We have held events as far back as February on this issue where we got petitions and raised awareness on this issue,” Pritchard said. “This agreement is positive for CalPIRG. Our goal of renewing the interest rates was met.”
However, according to the National Association of Student Financial Aid Administrators, student loans could still become more expensive for some students even if the deal is passed due to Congress’ recent elimination of the in-school interest subsidy for graduate and professional students. The new measure will take effect starting Sunday.
Pritchard said that CalPIRG does not support the decision to eliminate the interest subsidy and will continue to focus on affordable education policies at local, state and federal levels.
“We try to push policies that increase financial aid and promote affordable education,” he said. “We are not supportive of any policy that makes education less affordable.”
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