By Kim Glovas
PHILADELPHIA (CBS) – Many college students will be watching the vote in the U.S. Senate on freezing interest on Federal Stafford Loans at 3.4 percent. The vote, which could go today or tomorrow, is being seen by some as a barometer on how college students will vote in the fall.
“This is seen from the political angle as a battle for the student constituency,” says Catherine Wilson, an assistant professor of political science at Villanova University. “But it really does matter in terms of a short-term perspective if the interest rate rises, because the students are taking so much debt per year that it really could affect their long term situation.”
It’s uncertain how the vote will go because of how the two parties differ on how to fund the freeze.
“Republicans want to cut funds from the prevention and public health fund and the Senate Democrats want to reverse the tax loophole which allows Americans who earn more than $250-thousand in income that avoid Medicare taxes on their earnings, they want to reverse that tax loophole.”
If the Senate does not approve the freeze, the interest rate will double on July first to 6.8 percent. Both sides believe the other is unacceptable.
Federal Stafford loans are made to low and middle income students. Student loans of all kinds now exceed the nation’s credit card debt.