U.S. Senator Bill Nelson is going to propose a legislation this week that would unburden a lot of students from their debts. As of recently, federal student loan interest rates skyrocketed for college attendants. The senator wants to offer a possibility of equilibrium for both national economy and parties involved in this financial practice.
Nelson Compared His Proposal for Student Loan Interest Rates with Current Home Loans
U.S. Senator Nelson’s plan of action consists of a cap for undergraduates at 4% regarding their loan interest rates. That would significantly streamline the system as the current rate is double that value at 8.25%. More than that, the bill will consider those applicants that can’t make it in this initial tier of student loan debt. Therefore, those with loan rates that exceed 4% threshold will have the possibility of a refinance. This is something inconceivable at the moment as the law is the one that dictates such rates.
Nelson accompanied his announcement with a few remarks. He stated that the goal of a higher education could not be achieved when the required taxes are not for any budget. On top of that, Nelson underlined the high chances of this proposal to get the necessary approvals as the American legislature is already harboring a similar system. This is about real estate and its current option of home loans at 4% rates.
The Current Rates Are for Students Are The Highest in Three Years
Each beginning of July comes with the decision the Congress takes regarding new student loan interest rates. However, this year’s procedure did not go easier for students. On the contrary, the rates increased to 4.45%, which is the highest point since 2014. On top of that, unsubsidized loans for graduate students reached 6%, while parents of undergraduate students enlisted in PLUS loans will have to cover 7% rates.
Nelson stated on Wednesday that he intends to address the other categories as well besides undergraduates. Therefore, he is looking to obtain a 5% and 6% rates for graduate students and parents of undergraduates respectively.
Image source: 1