Saturday, June 30, 2012

US: Congress Passes Students Loans, Transportation Jobs Bill

Yesterday, the Congress gave approval to a massive bill that would

a)    create millions of transportation jobs
b)    keep interest rates low for student loans
c)     maintain federal flood insurance

The bill passed 373 to 52 in Republican led House and 74 to 19 in Democratic led Senate. All the President Obama has to do now is to sign it into law.


The bill aims to increase transportation spending by $105bn, which can potentially create, or at least save, up to 3 million jobs.

The politicians managed to pass the bill, just within the deadlines. The federal government spends nearly $50bn each year on transportation. The previous transportation bill expired almost three years ago, in 2009. Since then, the industry has been surviving on funding extensions, the last of which ends today, 30th June.

Student Loans

The issue of student loans was also nearing its own deadline. The bill prevents the federal student loan interest rates from increasing to 6.8% from the current 3.4% from 1st July, representing a 100% increase. Accordingly, the interest rates would remain at 3.4% for another year, as the government injects $6bn into the program, most likely, by increasing premiums for federal pension insurance.

Both Democrats and Republicans were unanimous in keeping the interest rates for federal student loans to their current levels; the debate was, instead, focused on how the target is to be achieved.

Commenting on the bill, the White House spokesman Jay Carney said, “"Thanks to Congress heeding that call today, millions of American students will avoid a $1,000 debt hike while millions of construction workers will be able to stay on the job,"

Flood Insurance

The bill has also extended the National Flood Insurance program to 30th September, 2017, as the government braces itself for a new hurricane season expected to begin from late July. Interestingly, the previous program was supposed to expire in July 2012, right in the middle of the hurricane season. 

your comments and feedback are always appreciated