Congress Passes 3.4 Percent Subsidized Stafford Loan Interest Rate Extension—Other Changes for Federal Student Loans Set for July 1

Comments Off on Congress Passes 3.4 Percent Subsidized Stafford Loan Interest Rate Extension—Other Changes for Federal Student Loans Set for July 1
July 2, 2012 · by Wes · Spark Notes

June 29, 2012

Prepared by: Wes Huffman (whuffman@wpllc.net)

Before departing for the July 4 recess, Congress passed the conference report to accompany the ''Temporary Surface Transportation Extension Act of 2012,” which included provisions to extend the 3.4 percent interest rate on subsidized Stafford Loans for one year.  The measure passed the House 353-72 and the Senate 74-19.  The President is expected to sign it this weekend.  The cost of extending the rate was paid for, in part, by limiting subsidized Stafford eligibility to 150 percent of academic program length.

In addition to looming over the 3.4 percent interest rate debate, July 1 will bring multiple federal student loan changes.  The special consolidation loan program for split-serviced borrowers ends on June 30.  Also, as of July 1, graduate students are no longer eligible for subsidized Stafford Loans and the Direct Loan program may no longer offer repayment incentives beyond the current interest rate reduction for automated debit payments.  The prohibition on repayment incentives applies to loans made on or after July 1, 2012.

House votes on the H.R. 4348 conference report are available online: http://clerk.house.gov/evs/2012/roll451.xml

Senate votes on the H.R. 4348 conference report are available online: http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=112&session=2&vote=00172

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