There’s talk on both sides of the political aisle of keeping student loan rates where they are, but the issue of how to pay for it is a partisan issue. There’s no argument from Democrats or Republicans – the interest on subsidized Stafford student loans should be kept at 3.4 percent. The rate is set to double July 1 if Congress doesn’t act.
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But U.S. Sen. Dick Durbin (D-Ill.) says while both sides agree rates should be kept where they are, there is disagreement on where money can be found to make up for the proposed interest hike. “One of the proposals out of the House of Representatives is to cut back on health care prevention money,” Durbin said. “Money that’s being spent for cancer screening, money that’s being spent for encouraging childhood immunizations, I think that’s entirely the wrong way to go.”
Durbin says the better plan is to close a loophole that gives big businesses big tax breaks. “What we do in the Senate instead is close a tax loophole that’s been available for those who make a lot of money in sub-chapter S corporations,” Durbin said. “It was a loophole added to the law several years ago and one that we can take out and pay for the reduction in interest rates on student loans. From my point of view, [it’s] much more reasonable than cutting health care prevention funds.” More than 365,000 Illinois students would be affected by the interest rate hike while 7.4 million would be affected nationwide.