Obama signs bipartisan student loan bill into law

On July 1, need-based student loan rates doubled from 3.4 percent to 6.8 percent. The bill will retroactively set rates on loans taken out after July 1 at 3.86 percent, but the rate is expected to increase next year with the Treasury note's.

Sens. Lamar Alexander (R-Tenn.), Joe Manchin (D-W.Va.), Richard Burr (R-N.C.), Angus King (I-Maine), Tom Coburn (R-Okla.), Tom Carper (D-Del.), Tom Harkin (D-Iowa) and Dick Durbin (D-Ill.) drafted the deal.

“I am pleased to see this important legislation signed into law. One hundred percent of students and borrowers are winning today,” Burr said Friday. “This bill ensures that student loan interest rates never become unaffordable for students, especially the poorest, who are seeking to improve their lives through higher education.”

The Senate passed the bill in an 81-18 vote last month despite opposition from liberal Democrats.

Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.) and Jack Reed (D-R.I.) argued that Congress shouldn’t “profit off the backs of students." They said the bipartisan bill would generate $184 billion of federal revenue over 10 years.

Before adjourning for the August recess, the House also passed the bill in a 392-31 vote. The House had passed similar legislation ahead of the July 1 deadline, which is why it quickly accepted the Senate changes.

“Seeing this bipartisan proposal become law reminds us of what can be accomplished through hard work, compromise, and faith in the legislative process,” House Education and the Workforce Committee Chairman John Kline (R-Minn.) said. “I look forward to building upon this success as we work toward other shared goals, including … improving college affordability and access through the upcoming reauthorization of the Higher Education Act.”

Lawmakers have called for reforms in college affordability as tuition costs continue to rise. Debate on the topic is expected during the reauthorization of the Higher Education Act, which is up next year. Senate Democrats have said they’d also like to address refinancing the $1 trillion in existing student loan debt.