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Democratic Split Thwarts Bill to Reduce Student Loan Rates

HeadlineJul 11, 2013

A split among Democrats has blocked an effort to reverse the doubling of interest rates on federally subsidized student loans. The interest rate for Stafford loans doubled to 6.8 percent earlier this month after Congress failed to reach a deal to avoid the hike. On Wednesday, a bipartisan group of senators blocked a Democratic proposal to return the rate to 3.4 percent retroactively. Several Democrats joined a Republican filibuster after Democratic leaders rejected their proposal to link the student loan rate to market rates and the costs of federal debt. Lawmakers can still reverse the interest hike if they act before most loans are issued next month.

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