President Barack Obama signed into law today a bill that will lower student loan rates for this year.
“The amount of debt that young people are coming out of school with is a huge burden on them; it’s a burden on their families,” Obama said in a White House statement.
The bill, called the Bipartisan Student Loan Certainty Act of 2013, will cut interest rates for undergraduate students from 6.8 percent to 3.9 percent, while graduate students will have a 5.4 percent rate. Parents and graduate students getting PLUS loans, loans made by the U.S. Department of Education, will pay a 6.4 percent rate for this school year.
The bill also ties student loan interest to the financial market, making them dependent on the federal borrowing rate. This could cause rates for undergraduates rise to as high as 8.25 percent if the economy improves in coming years.
The U.S. House of Representatives passed the bill, which started in the Senate, on July 31.
Compiled by Estefani Herrera, Bruin contributor.