Federal student loans will be on many new students’ horizons as they finalize their financial aid packages next month.
And this week, the U.S. Senate is facing mounting pressure to address the year-to-year uncertainty surrounding the loans.
The interest rate on new subsidized Stafford loans doubled last week from 3.4 to 6.8 percent after the Senate rejected a bill passed in May by the House of Representatives and failed to find an alternative in time.
President Barack Obama and both chambers of Congress support a permanent answer to the nagging interest rate question — but their squabbling over competing plans could lead to a one-year Band-Aid until they reach agreement.
A Senate procedural vote was scheduled for Wednesday to return loans to the 3.4-percent level for a year. As of The Daily Tar Heel’s deadline, no action had been taken.
“Getting all of those players on the same page has proved extraordinarily difficult,” said Ferrel Guillory, a UNC journalism professor and expert on Southern politics.
More than seven million undergraduates take out subsidized Stafford loans annually — including nearly 200,000 in North Carolina.
For current students with the loans, the lower rate will remain in place regardless of federal action.
But first-time student borrowers could face darker and more muddled financial waters next month, said Jeff Lieberson, spokesman for the Association of Public and Land-grant Universities.
“What we’ve seen is short-term fixes over and over again,” he said.