President Obama signs new student loan legislation into law

President Barack Obama last week signed into law the Smarter Solutions for Students Act (H.R. 1911, also known as the Bipartisan Student Loan Certainty Act as amended by the Senate). The new law will:

  • Calculate undergraduate Stafford loans using a formula based on the 10-year Treasury note plus 2.05 percent. 
     
  • Calculate graduate Stafford loans using a formula based on the 10-year Treasury note plus 3.6 percent.
     
  • Calculate graduate and parent PLUS loans using a formula based on the 10-year Treasury note plus 4.6 percent.
     
  • Protect borrowers in high interest rate environments by including an 8.25 percent interest rate cap on Stafford loans made to undergraduates, a 9.5 percent cap on Stafford loans made to graduate students, and a 10.5 percent cap on PLUS loans.
     
  • Provide stability for students by locking in interest rates for the life of the loans, and prevent future uncertainty about whether Congress is going to act in time to change the interest rate.

For more information about the new law visit the Smarter Solutions for Students Act website.

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