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Photo: <a href="">hmocopymonkey</a>, Creative COmmons, some rights reserved
Photo: hmocopymonkey, Creative COmmons, some rights reserved

Gillibrand: Rate compromise would leave students "laden with debt"

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Senator Kirsten Gillibrand says she voted against a recent compromise on student loans because the interest rates shouldn't be tied to market rates.

Congress let interest rates on government subsidized student loans double on July first to nearly seven percent.

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Last week lawmakers worked out a deal to allow rates to be tied to 10-year Treasury notes. That temporarily lowered the rates again.

Gillibrand, a Democrat, says the deal would have hurt students in the long run:

"They will be laden with debt that they cannot afford. They may have to postpone having children, buying a home, starting a business. And frankly, I don't think the U.S. government should be making money off the backs of our students."

While back below four percent, student loan rates will now rise and fall with the economy - like home or auto loans.

That could allow undergraduate loans to rise to more than 8 percent before a cap kicks in.  

Gillibrand says students should be able to refinance their loans to get better rates.

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