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July 11, 2013

Democratic Split Thwarts Bill to Reduce Student Loan Rates 
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A split among Democrats has blocked an effort to reverse the doubling of
interest rates on federally subsidized student loans. The interest rate
for Stafford loans doubled to 6.8 percent earlier this month after
Congress failed to reach a deal to avoid the hike. On Wednesday, a
bipartisan group of senators blocked a Democratic proposal to return the
rate to 3.4 percent retroactively. Several Democrats joined a Republican
filibuster after Democratic leaders rejected their proposal to link the
student loan rate to market rates and the costs of federal debt.
Lawmakers can still reverse the interest hike if they act before most
loans are issued next month.

 

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