The House today approved legislation that will reduce interest rates for undergraduate student loans this school year to 3.86 percent.
The vote follows approval by the Senate of the same bill.
It will now go to President Obama for his signature.
The new rates will be retroactive to July 1.
Graduate students will have to pay 5.41 percent interest on their loans which is based on 3.6 percent rate higher than the 10-year Treasury bills.
However, after this coming school year student loans can increase if overall interest rates rise.
For undergraduate students the loan rate is based on the 10-year Treasury note plus 2.05 percent points.
The bill caps undergraduate loan rates at 8.25 percent and graduate school rates at 9.5 percent.
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