Congresswoman Suzanne Bonamici (D-OR) voted Wednesday for the Senate’s bipartisan student loan compromise that will lower undergraduate student loan interest rates for subsidized Stafford loans from 6.8 to 3.86 percent for 2013. Future rates will be calculated annually based on the government’s cost of borrowing, but are capped at 8.25 percent for undergraduate loans and are fixed for the life of the loan.
“This legislation will provide $25 billion in student debt relief over the next five years, saving a student as much as $2,000,” Bonamici said. “The bill isn’t perfect, but it is substantially better than the legislation the House originally considered. It is a product of compromise and an example of what Congress can achieve when both parties work together.”
In May, Bonamici voted against an alternative student loan interest rate proposal, which would have created an annually calculated variable interest rate capped at 8.5 percent. Under that proposal, a freshman entering college in 2013 would have paid up to $10,000 in student loan interest. A similarly situated student would have paid just $9,000 if Congress had done nothing and allowed rates to be maintained at 6.8 percent. Under the bipartisan bill Bonamici voted for today, maximum interest paid would be approximately $7,000.
In addition to adjusting loans for undergraduates, the bill also cuts rates for graduate students from 6.8 percent to 5.4 percent in 2013. Parents and graduate students borrowing PLUS loans will borrow at 6.4 percent in 2013, a cut from 7.9 percent.