After weathering a storm of criticism for the their inaction, the U.S. Senate has passed a bill that would drop interest rates on subsidized federal undergraduate student loans from 6.8 percent to 3.9 percent this fall, and then tie interest rates to the market.
The action affects about 7 million students, USA Today noted. Minnesota DFL Sens. Amy Klobuchar and Al Franken voted for the legislation, approved by the Senate Wednesday 81-18, the Star Tribune noted.
The U.S. House is expected to approve the legislation before an August recess.
The rates on July 1 had doubled to 6.8 after lawmakers could not draft a compromise agreement ahead of that deadline.
The loans at issue include Stafford loans, mostly for students from low-income families, Bloomberg reported.
More broadly, Minnesota students carry the third-highest loan debts in the nation, according to one recent report. More than 9,500 higher education students in the state have defaulted in the past three years, it was reported last year.
A recent report from the Minnesota Office of Higher Education shows Minnesota college students who graduated in 2010 borrowed an average of $29,800.
Student loan debt in the nation has been on a steady rise in the last decade, climbing from about $346 billion in the fourth quarter of 2004 to $996 billion in the fourth quarter of 2012, according to a recent Federal Reserve Bank report.