As of July 1, Federal student loan interest rates doubled to 6.8%—a matter that could be fixed retroactively by Congress. That's little consolation for students whose debt might increase by thousands of dollars over the life of the loan.
A bipartisan group of senators are hoping to generate support for a proposal that would tie interest rates to the bond market—the government's cost of borrowing. According to the L.A. Times, Susan Dynarski argues that such a solution might prove helpful to borrowers by offering lower interest rates and getting the matter out of the political arena.
Dynarski's research has examined the effect of grants and loans on educational attainment and the optimal design of financial aid.
Get the student loan matter out of the political arena, according to Dynarski
July 9, 2013