This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Six Bills Into One Student Loan Deal Won't Go

NEW YORK (MainStreet)--There are six student loan bills in Congress, plus a proposal from the White House. There is one interest rate for subsidized Stafford loans. Come July 1, there will continue to be one interest rate. Whether or not the subsidized Stafford rate will double from 3.4% to 6.8% is anyone's guess.

Three bills are in the Senate, three in the House. Three have long term solutions, three are short term. Then there is the Obama administration's plan, which the Republicans say is so much like their House bill that President Barack Obama favors partisanship over a solution by not adopting it. Obama, meanwhile, says that the Republican bill would be more expensive to borrowers in the long term than if rates doubled.

Obama may be right, but it's moot at this point. The Democrat's Reed-Harkin bill, which would freeze the current rate for two years, got 51 votes in the Senate but for procedural reasons, needed 60. With fewer than six days before the Stafford loan rate expires, none of these bills currently has a chance.

Lauren Asher, president of Oakland, California-based The Institute for College Access and Success, which has proposed its own remedy--declined to handicap the chances of any of these bills. "I have no idea what's going on in the House or Senate committees," she said.

"There's been a lot of posturing about how there isn't much difference between these proposals when in fact there is a lot," said Asher. "A permanent change that increases the cost for borrowers is worse than no change at all."

"Our view of the Republican bill is that it will pay down the debt on the backs of people with student loans. But we have concerns about Obama's proposal as well. Obama wants an expansion of the income-based repayment plan, but he also puts no cap on how high rates can rise, giving borrowers no protection from rising interest rates. The Obama plan has that in common with the Republican plan. The Republicans and Obama say that having no rate cap is O.K., because of the income repayment plan. We say that this is no substitute for a rate cap."

To qualify for an income-based repayment (IBR), borrowers must have a partial financial hardship, defined by the Department of Education website as when the monthly amount required on your IBR-eligible federal student loans under a 10-year Standard Repayment Plan is higher than the monthly amount you would be required to repay under IBR.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,950.39 +30.80 0.18%
S&P 500 1,983.65 +2.05 0.10%
NASDAQ 4,527.4580 -0.0560 -0.00%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs