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Student loans: Could GOP, White House strike a compromise on interest rates?

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Here are some of the key elements up for debate:

The move away from Congress “arbitrarily” setting student interest rates is welcome, but “both the House proposal and the administration’s proposal miss the mark,” says Pauline Abernathy, vice president of The Institute for College Access & Success (TICAS) in Washington.

Under the president’s proposal, for instance, rates on unsubsidized Stafford loans are projected to exceed the current 6.8 percent by 2016 and top 8 percent by 2018, she says. A student borrowing $20,000 and earning $30,000 in income (that rises 4 percent a year) would end up with $7,000 more in costs if he or she has an 8 percent interest rate instead of 6.8 percent, according to a TICAS analysis.

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