On the last business day before the interest rate was scheduled to double on new federally subsidized student loans, Congress approved a bill to keep the interest rate at 3.4 percent for another year. The extension, which cost about $6 billion, was included as part of a highway bill that passed both houses with large majorities.
However, some changes to the student loan program took effect Sunday. Subsidized loans for graduate students, cut last August in the deal to increase the federal debt ceiling, are no longer available. And the "grace period" on subsidized undergraduate loans -- under which the government paid the interest for six months after students left college -- has been eliminated as well.
Also, students receiving Pell Grants lose eligibility after 12 semesters, not 18 -- including those already in the program who have passed the limit.