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House votes to approve student loan compromise

The U.S. House of Representatives on Wednesday passed a bill to lower the interest rates on federally subsidized student loans, a deal that doesn’t immediately affect many Syracuse University students but has implications for more than 10,000 borrowers this fall.

The interest rates for federally subsidized Stafford loans doubled on July 1 from 3.4 to 6.8 percent when Congress failed to deal to keep them from going up. A
compromise to lower rates passed in the Senate last week, and was easily approved in the House with a 392-31 vote.

“I applaud the bipartisan compromise reached by President Obama and lawmakers on Capitol Hill, offering relief to millions of students and families across the country,” Secretary of Education Arne Duncan said in a statement. “It is an encouraging step forward in our effort to keep college affordable.”

Duncan has said the compromise would save undergraduates more than $1,500 during a loan’s lifetime.

The bill now goes to President Barack Obama, who last week urged the House to pass the legislation so he could “sign it into law right away.”

Students who are in Summer Session II and took out loans after rates doubled  July 1 will see their rates go down, said Patricia Johnson, associate director of the Office of Financial Aid and Scholarship Programs at SU, in an email. This applies to fewer than 100 students, she said.

Johnson said more than 10,000 borrowers in the fall will then be affected by the new interest rates, which are: 3.86 percent for undergraduates, 5.4 percent for
graduate students and 6.4 percent for PLUS loans — or those given to parents of college students.

Student loan rates will now be tied to the financial market— though they’ll be capped at 8.25 percent for undergraduates, 9.5 percent for graduates and 10.5
percent for PLUS loans.

U.S. Rep. Dan Maffei (D-DeWitt), whose 24th Congressional District includes Onondaga County, voted to pass the bill.

Maffei has about $30,000-$100,000 in student loan debt, according to his 2012 financial disclosure statement.

His spokesman, Marc Brumer, didn’t immediately return two messages to his cell phone.

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