Congressman David Dreier (R-San Dimas, CA) voted last week to prevent interest rates from doubling on federally subsidized undergraduate loans. The interest rate extension was included in H.R. 4348, the Moving Ahead for Progress in the 21st Century Act, which passed the House overwhelmingly on Friday with bipartisan support by a vote of 373-52.
"Recent college graduates are struggling to find work in these tough economic times," said Dreier. "Without Congressional action, interest rates would have doubled and inflicted an unacceptable burden on these already vulnerable young people."
This legislation will maintain an interest rate of 3.4 percent on subsidized Stafford Loans for the 2012-2013 school year. Interest rates on these loans were temporarily cut in half, from 6.8 percent, starting in 2008. The interest rate reduction was set to expire on June 30th, 2012. The extension is fully paid for through reforms to pension and student loan programs and will not add to the deficit. The agreement to maintain the lower rates was reached last week after bipartisan negotiations between the House and Senate.