U.S. Senate passes student loan interest rate legislation - WBOY.com: Clarksburg, Morgantown: News, Sports, Weather

U.S. Senate passes student loan interest rate legislation

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Future college students and their parents can breathe a sigh of relief. For now.

The U.S. Senate on July 24 passed legislation that would lower interest rates on federal student loans and cap those rates in the future. The Bipartisan Student Loan Certainty Act passed by a vote of 81-18, and was championed by Sen. Joe Manchin, D-W.Va.

Manchin joined a group of senators — Democrats, Republicans and Independents — to draft and pass the bill.

"In just a few short weeks, students will be returning to school knowing with certainty what their interest rates will be on their loans for the upcoming school year," Manchin said in a statement. "I thank my colleagues on both sides of the aisle for coming together to pass this common sense, long-term fix that lowers rates for all of our students."

According to information from Sen. Jay Rockefeller's office, the legislation will save a typical graduate $1,500 over the life of the loan.

"The compromise bill averts an immediate crisis by lowering interest rates for students over the next few years," Rockefeller, D-W.Va., said in a statement. "We want to encourage our students to get higher degrees and follow their dreams, not weigh them down with debt they'll never be able to pay off."

The bill reduces the interest rates on loans made after July 1. Those rates had doubled because Congress failed to pass legislation that would keep the rates low. The compromise bill that passed Wednesday extends the 3.4 percent interest rate for one year. However, this plan does not have the support of U.S. House Republicans, who hold the majority, or President Barack Obama.

Congress passed similar stop-gap legislation in 2012.

But for parents, the bill isn't enough to solve their problems.

Joe Frank, the parent of a high school senior in Fayette County, said he'd like to see members of Congress find realistic solutions to the college funding problem he and many other parents are facing.

"The cost of going to college has tripled with no end in sight," Frank said. "That's the problem—when you get out you will be in debt the rest of your life. People that get out owe tens of thousands of dollars and can't find a job or if they do its only pays an average of $25,000 to $30,000? That's insane."

But Frank is lucky because he and his wife have saved for their daughter's college education. However, many other families across the country don't have that luxury.

According to website findthedata.org, student loan default rates in 2009 at six of West Virginia's four-year public institutions exceeded 10 percent. Only Marshall University (9.9 percent), Shepherd University (6.8 percent) and West Virginia University (7.6 percent) had default rates below 10 percent. Bluefield State College had the highest default rate at 17.7 percent, followed by Concord University at 16 percent, West Liberty University at 15.4 percent, Glenville State College at 14.6 percent, West Virginia State University at 14.1 percent and Fairmont State University at 13.7 percent.

Those numbers are a dramatic increase over the default rates for the same schools in 2006. Only Bluefield State, at 15 percent default rate, exceeded 10 percent.

According to the West Virginia Center on Budget and Policy, the average debt of West Virginia four-year public college graduates is more than $25,000, a $10,000 increase since 2004. The national average is $23,065 of student loan debt per graduate.

Although the bill has passed the Senate, it must now pass the U.S. House of Representatives.