U.S. Sen. Sherrod Brown (D-OH) announced Thursday new legislation that would prevent an increase in federally-subsidized Stafford student loans. Brown said the legislation — called the “Stop the Student Loan Interest Rate Hike Act of 2012” — would maintain the current interest rate, which is set at 3.4 percent, and prevent a hike to 6.8 percent that is scheduled to begin July 1.
Brown co-sponsors the bill with democrat Sens. Jack Reed of Rhode Island and Tom Harkin of Iowa.
He explained that in 2007, the College Cost Reduction and Access Act cut the fixed interest rates on newly-subsidized Stafford loans for undergraduate students to 3.4 percent over a set period of time, but the interest rates on any new subsidized Stafford loans will double to 6.8 percent on July 1 unless Congress takes action. The rate increase would not apply to loans that are currently in repayment or that have already been disbursed, he said.Bill would limit student loan rates »