New Student Loan Interest Rates May Double

The interest rates on new subsidized Federal Direct Stafford Loans for undergraduate students may be doubling in the near future.  Congress passed a law in 2007 that cut student loan interest rates to 3.4%.  If Congress does not act, the interest rates will double to 6.8% this July 1st.  Today the House of Representatives passed a bill to extend the low interest rates.

However, the White House has threatened to veto the bill if the final version includes a repeal of the Prevention and Public Health Fund-a fund that would provide for hundreds of thousands of screenings for breast and cervical cancer, which is what the current proposal uses to fund the $6 billion dollar price tag of the bill.  Democrats say they want to pay for the bill by eliminating some of the subsidies on the oil industries.  The Senate is expected to take up its version of the bill the week of May 8th.

In spite of their differences over how to pay for the measure, most Democrats and Republicans (along with the President) agree that they should extend the lower student loan interest rates.  Stay tuned.  For information regarding the discharge of student loans in bankruptcy please call me, Kansas City bankruptcy attorney Cary Smalley of The Smalley Law Firm, at (913) 601-3549 for a free Kansas City bankruptcy consultation or visit my website at http://www.thesmalleylawfirm.com