Democratic Plan to Preserve Student Loan Rates Would Raise $8.6 Billion

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Most of the funding to offset the cost of keeping student loan interest rates at their current level for two more years would come from a new limit on beneficiaries of inherited retirement accounts, according to a June 5 Senate Finance Committee summary of revenue provisions.
The Senate is scheduled to take a vote June 6 on the Democrat-backed bill (S. 953), which includes that revenue provision, as well as on a Republican-supported alternative.
The Democratic proposal, sponsored by Sens. Jack Reed (R.I.) and Tom Harkin (Iowa), would raise a total of $8.6 billion over 10 years to pay for a two-year freeze on federally subsidized Stafford loan rates. It would keep rates at 3.4 percent rather than let them rise to 6.8 percent July 1, as currently scheduled.
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