INSIDE HIGHER ED. JULY 10, 2013. Eight days after the interest rate on new, federally subsidized student loans increased to 6.8 percent, the two parties in Congress seemed further away than ever on a compromise that could retroactively undo the increase. A bipartisan coalition of Senate Republicans, Independents and Democrats have put forward a bill for market-based interest rates that has much in common with President Obama’s plan, but the Senate Democratic leadership would rather extend the current 3.4 percent interest rate for another year — a proposal that’s a nonstarter with Republicans in the House and Senate.
The Senate will vote on the one-year extension bill today.