Obama Takes Steps in Student Loan Reform
Posted: Thursday, August 15th, 2013 at 6:25 am
Last Friday Obama signed the Bipartisan Student Loan Certainty Act of 2013, which is one of the important steps taken by his administration in procuring their main goal towards reducing the student loan burdens on graduates and undergraduates.
The new law will lower the current interest rates to 3.86 percent for undergraduates and 5.41 percent for students who have graduated. The lowered rates will apply for all federal student loans, PLUS loans, and unpaid balances on consolidation loans.
Interest rates are now set to fluctuate and adjust to parallel with the national health of the economy. When the economy is improving, the rates will rise. When the economic health of the nation declines the interest rate on student loans will reflect that.
Though the House of Representatives passed the legislation during the end of July, the new rates are affective immediately to all student loans that were created since July 1st, 2013.
Back in 2011 the Obama administration announced that it was beginning to take focused and proactive steps on reducing the student loan debt situation. The administration recognized that the percentage of students with debt was one of the main concerns causing additional duress on the health of the economy as a whole. The administration has since been taking aggressive steps by working to make student loans more affordable and manageable for students.
In July of last year Obama signed a law into legislation that stopped current student loan interest rates from increasing while preserving administrative and transportation infrastructure. In 2010 Obama signed a bill that discontinued the practice of private lenders and banks from providing loans that gave funding for federal student loans. Obama stated that it was in the students’ and nation’s best interest that student loans are managed completely by the government and not by private companies that operate out of self-interest for profit.
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