New Student Loan Law Offers Short-Term Benefits and Potentially Long-Term Headaches


 Today, President Obama is expected to sign into law a bill that would both reduce interest rates on all new federal student loans and tie them to financial markets going forward. The law is expected to impact 11 million borrowers — leading to a savings of thousands of dollars over a loan’s lifetime. Yet many students and education advocates alike are expressing concern that the law could lead to higher student-loan rates in the long runpercent and parents taking out PLUS loans pay 6.4 percent. Previously, rates for PLUS borrowers stood at 7.9 percent.

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