Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jun 1, 2012

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

As July 1 fast approaches, the date that federal student loan interest rates are scheduled to double, the two major political parties have both struck down each other’s proposals at extending the artificial interest rate ceiling.

The most recent failed vote came as a result of Republican lawmakers voting against a Democratic proposal to pay for the cost of keeping college interest rates low by raising certain businesses taxes.

But a counteroffer has just been made, and conservatives are asking Democrats to consider raising retirement costs for federal employees in an attempt to pay for the multi-billion dollar cost of keeping student loan rates at their current 3.4 percent cap.

“We believe our alternative is reasonable and responsible, but in the interest of finding common ground on a way to pay for a one year extension of the current student loan interest rate we are open to other solutions that we have all supported in the past,” conservatives from both the House and Senate said in a letter addressed to President Obama.

Currently, most federal employees contribute 0.8 percent of their salary to their own civil service retirement benefit, plus an additional 4.2 percent towards social security.

In response, the National Treasury Employees Union (NTEU) submitted a letter of its own to the President, urging him to reject Republican’s proposal.

“While we have not always agreed with your budget proposals, you have consistently pushed for balanced proposals that require burdens to be broadly shared,” began NTEU President Colleen M. Kelley in the letter. “On the other hand, the House and Senate Republican leadership has sought to single out the federal workforce as virtually the only source of acceptable spending cuts and revenue increases.”

The letter from the Republicans suggested another proposal for funding the student loan interest rate reduction by changing the way federal student loans work, the way Medicaid currently works, and the way Social Security payments are collected.