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Congressional Democrats introduced legislation on July 27 that would lower student loan interest to 0%, while capping rates for future borrowers. If passed, this would be a huge help to 44 million...
An education loan is a loan taken out by the student (or parent) to pay for educational expenses. Unlike scholarships and grants, this money must be repaid with interest. Educational loan options include federal student loans, federal parent loans, private loans, and consolidation loans.
Graphic 1: Total number of dollars (in billions) entering default, 2009-2018, data source: CRS Graphic 2: This graph portrays the changes in the interest rate for direct subsidized loans, 2004-2019. Default and delinquency are increasingly common and are a large risk the government bears when giving out low-interest rate loans.
[citation needed] Federal student loan interest rates are established by Congress and listed in § 20 U.S.C. § 1087E(b). Because the interest rates are established by Congress, interest rates are a political decision. In 2010, the federal student loan program ran a multibillion-dollar "negative subsidy", or profit, for the federal government.
The proposal announced last week would fully wipe accrued interest for 23 million student loan borrowers, ... $30,000 loan in college and entered Standard 10-year repayment at a 3.6% interest rate ...
From March 2020 to September 2023, all federal student loans were effectively frozen and interest accrual was on pause, thanks to an unprecedented series of student loan payment pauses spurred by ...
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