Legislation (S. 1762) designed to ensure the future availability of affordable student loans was easily approved, 372-3, by the House on January 24. The Senate passed the bill by unanimous consent on December 14, 2001. Both the House and the Senate approved identical bills clearing the way for the bill to be sent to the President for his signature.
Sponsored by Sen. Tim Johnson (D-ND), the measure extends the current interest rate formula, which now provides the lowest interest rate (5.99 percent) in the history of the student loan program, until FY2006. Interest rates on student loans made to students after July 1, 2006, would be fixed at 6.8 percent, and interest rates on loans made to parents would be fixed at 7.9 percent. The bill would cost $9.5 billion over 10 years.
“Last year, under the rate cut formula negotiated as part of the 1998 Higher Education Act reauthorization, the federal student loan rate fell to its lowest level in history,” said Education and the Workforce Committee Chair John Boehner (R-OH). “This legislation builds on that success to ensure that college loans stay affordable for young Americans,” he added.
