It looks like Congress has some good news for 7 million students taking out loans for the next school year.
On June 29, 2012, Congress voted to extend low 3.4 percent interest rates on federally subsidized student loans for another year. This barely beats the July 1 deadline when the rates would double. This bill is wrapped up in a bigger bill that spends more than $100 billion to continue funding for programs that pave roads and improve bridges.
Let's break down the two bills for better a understanding of who and what is affected:
Student Loan Bill
For months, Republican and Democratic lawmakers have said that they agree that the interest rates should hold steady. President Obama brought national attention to the issue of student loan interest rates and even started a campaigning for it. Republican candidate for president Mitt Romney has also extended his support of the extension of the low rates.
Lawmakers decided that the revenue to extend the 3.4% rates should come from changes to the way companies fund pension programs, according to CNN Money. The deal would also place a boundary on how long undergraduate students can go to school without accruing interest on student loans to six years.
For subsidized loans, the interest rate used to be 8.6 percent, but when Democrats took over the House back in 2007, they passed in lower rates. The rates fell to the current low of 3.4 percent for subsidized Stafford loans this past school year, and was scheduled to revert back to 6.8 percent for the 2012-2013 school year.
Transportation Bill
Congress gave final approval to a $109 billion transportation funding bill as part of a package that includes a measure holding down interest rates on federal student loans. This portion of the bill funds construction for highways, bridges and other transportation projects for two years in every state and congressional district in the nation.
President Obama has pushed for this as a way to boost job growth in the construction industry and both parties expressed interest in reaching a deal, according to CNN.
Overall
The package won Senate approval with a 74-19 vote after earlier passing the House 373-52. It now goes to the President to be signed into law. Passing this package meant Congress beat looming deadlines, with highway repair funding and the lower student loan rates set to expire on June 30.
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