Congress returns to work Monday after the July 4 recess, with a student-loan fix near the top of the to-do list.
Interest rates on government-subsidized Stafford loans doubled last week to 6.8 percent after the Senate rejected two competing proposals for keeping the rate down: a Republican bill to link Stafford rates to the rate on 10-year Treasury notes, and a two-year extension of the three-point-four-percent rate which expired last week.
Modified versions of those proposals are back on the table this week.
Sen. Joe Donnelly, D-Indiana, says he is open to both ideas but says the Republican’s variable interest rate plan needs tweaking.
“The marketplace can, obviously, raise too much,” says Donnelly. “If you’re going to do market-based rate ones, then you have to have a cap so that there’s a certain interest rate you cannot go above.”
Subsidized Stafford loans account for about a quarter of government-sponsored student loans.