Both chambers of Congress voted June 29 to extend the 3.4% interest rate on subsidized Stafford loans by large, bipartisan margins. The House voted for the measure 373-52; the Senate approved the measure 74-19. The vote came down to the wire—on July 1, interest rates were set to increase to 6.8%.
According to The Washington Post, the $6-$7 billion deficit created by decreasing the interest rate was made up for by changing the pension calculations of certain companies, reducing their tax deductions and increasing premiums to pension programs.
The bill also cuts federal transportation funding for certain programs by two-thirds, giving more transportation spending authority to states, extends the federal flood insurance program to protect 5.6 million households and businesses, and requires that 80% of fines assessed for violations of the Clean Water Act go to a trust fund benefiting Gulf Coast states damaged by the Deepwater Horizon oil spill in 2010.
Though both parties wanted to extend the reduced interest rates, essentially saving $1,000 annually for more than 7 million students taking out new loans, it took months for Republicans and Democrats to come to a compromise. From women’s health to Social Security to tax benefits for small business owners, the bill hit every point of contention between the parties before they came to an agreement.
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