Earlier this month, Congressional stalemate lead to borrowing rates for Stafford loans doubling from 3.4 to 6.8 percent.
This new bipartisan agreement would tie college loan rates to the market, which Portman points out was also in a White House proposal. Portman says doing this means more predictability and certainty for families.
“Under the way they set this up, the rate today would actually be 3.86 percent," Portman said during a conference call with reporters. "One thing that I like about their approach, is, it gets the majority of loans, not just a minority of loans. In other words, it does the subsidized and the unsubsidized. For the graduate rates, there’s a slightly higher offset for the costs associated with defaults and collections, and so on. And that rate would be 5.41 percent.”
Interest rates could still climb as the economy improves, but for now both Senate Republicans and Democrats seem poised to approve the deal following weeks of squabbling.
Differences between the Senate and House versions must still be worked out, before President Obama signs off on the legislation. The House passed its own version last month.