Senate approves bill on student loan rates

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Associated Press

Posted on July 24, 2013 at 10:04 AM

Updated Wednesday, Jul 24 at 11:01 PM

WASHINGTON (AP) — The Senate has passed a bill that would make it less expensive for college students to borrow money this fall to pay for classes, housing and books. But interest rates could soon start climbing.

The proposal passed on Wednesday would link interest rates on federal student loans to the financial markets. That means student loans for the next few years would have lower interest rates. Higher rates would come in later years if the economy improves as expected.

Liberal Democrats opposed the White House-backed proposal as a bait-and-switch measure that would lure in new borrowers. Republicans supported the measure and helped the bill win passage. The bill is similar to one the House has already passed.

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