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Obama signs bill extending lower student loan rates for one year

By Steve Zoski, Daily News Editor
Published July 12, 2012

President Barack Obama has spoken about making college more affordable, delivering financial aid reform and protecting students from student loan interest rate increases throughout this election year.

On July 6, Obama signed a bill that, in addition to authorizing $100 billion in funding for transportation projects, will direct $6.7 billion to delay the increase of the rate on subsidized Stafford student loans for undergraduates from 3.4 percent to 6.8 percent interest for one year.

The bill came to Obama’s desk after passing the Senate 74-19 and the House 373-52. No Democrats voted against the legislation, which was also supported by Republicans.

According to USA Today, before he signed legislation extending the lower rate for one year, Obama had to sign a one-week extension on June 29. If congress hadn’t created legislation to extend the rate, it would have reverted to the 6.8-percent rate. Graduate students and undergraduates with unsubsidized student loans already pay the 6.8-percent rate.

According to The New York Times, the rate had been at 6.8 percent until 2007, when legislation reduced the rate to 3.4 percent until a July 1, 2012 deadline.

The New York Times added that congressional Democrats had introduced the legislation in 2007 to bring the rate to 3.4 percent with low- and middle-income undergraduates in mind.

Throughout the past year, both Obama and University President Mary Sue Coleman discussed the value of making higher education more affordable for students.

Last December, an open letter that Coleman sent to Obama calling for affordable higher education was released to the public. Obama then addressed the need for college affordability in his State of the Union address on Jan. 24.

In the speech, Obama said college affordability is vital.

“Higher education can’t be a luxury — it is an economic imperative that every family in America should be able to afford,” Obama said.

Three days later on Jan. 27, Obama spoke at the University’s Al Glick Field House, where he called for financial aid reform.

Coleman issued a press release in support of Obama’s remarks regarding higher education in his State of the Union address, then appeared alongside Obama during his visit to the University.

On April 24, Obama held a conference call from Air Force One with reporters from various college newspapers in which he called for students to get engaged and be vocal about stopping student loan interest rates from doubling.

In the conference call, Obama, who noted that he and his wife remember their experience paying their own student loans, said student loan debt continues to grow.

“For the first time now, we’ve got Americans owing more debt on their student loans than they do on their credit cards,” Obama said.

In the conference call, Obama warned that the Stafford rates were due to double to 6.8 percent by July if students didn’t make their voices heard, adding that the issue has “never been more important.”

According to CNN, when he signed the one-year extension last week, Obama said he hoped the bipartisanship that contributed to the bill’s passage would continue.

“ ‘This is an outstanding piece of business, and I’m very appreciative of the hard work that Congress has done on it.