Interest Rates On Student Loans Set To Double Monday
BOSTON (CBS) -- Student loans - subsidized by the government - are the only reason some kids are able to go to college.
But the interest rate on new loans is scheduled to double on Monday unless members of Congress can agree on a way to avoid it.
So far, no deal has been reached.
The good news is there's an emerging consensus that even if the rate does double next week, students who take out those loans will get retroactive relief.
The bad news - a long-term fix seems less likely than ever.
Sen. Elizabeth Warren, is joining other state democrats in an 11th hour appeal for more time to create a long-term solution for the Federal College loan system.
But while it appears all sides are prepared to keep the interest rate for Stafford Loans at their current rate for now, today's developments underscore what a political mess this issue has become.
Thursday morning, a bi-partisan group of senators backed a plan to tie loan rates to fluctuations in treasury notes, likely forcing borrowers to pay more over time than they do now but capping their debt in the long run.
The cap appeared to address concerns about interest-rate creep from the President, who has endorsed tying loan rates to treasury notes.
Some senators want to flat-out end the loan program's role as a major government revenue producer.
"This is also a moral question," Warren said. "The U.S. Government should be investing in students, not charging them profit for getting an education."
