Is Congress planning to address the disparity between the interest rates for FFELP PLUS and Direct PLUS loans?
Prior to the recent legislation, the Higher Education Act required FFELP and Direct PLUS interest rates to be fixed at 7.9 percent effective for loans first disbursed on or after July 1, 2006. The Deficit Reduction Act of 2005 altered that language by stipulating that the FFELP PLUS fixed interest rate will be 8.5 percent. The legislation did not make a corresponding change to the Direct PLUS rate. Congressional staff members have indicated that the failure to apply the rate change to Direct PLUS loans was an oversight. It remains unclear whether or how quickly this disparity in the legislation will be corrected.
