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Congress gave 11th-hour approval Friday to a measure - loudly championed by Congressman Joe Courtney - that will prevent the interest rate on new federally subsidized student loans from doubling at midnight tonight.
The provision affecting undergraduate Stafford Loans was tucked into a massive federal highway bill carrying a price tag that exceeds $100 million.
Under the bipartisan legislation, the interest rate on new loans for the 2012-2013 academic year will stay at 3.4 percent rather than jump back to 6.8 percent. Absent congressional action, a 2007 law that had gradually reduced the rate was set to expire.
The new one-year extension is projected to save more than 7 million college students about $1,000 apiece over the life of their student loans.
The complete bill passed both the Republican-controlled House and Democrat-majority Senate on Friday by votes of 373-52 and 74-19, respectively. The White House press secretary announced that President Barack Obama is looking forward to signing it.
"For months, President Obama has been calling on Congress to take up these two important priorities before middle class families pay the price for inaction," the statement read. "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."
Courtney, D-2nd District, introduced the initial proposal to extend the current interest rate after the president mentioned the July 1 deadline during his State of the Union address in January. The three-term congressman, who is seeking re-election, was also the most outspoken of his House colleagues on the issue, delivering more than two-dozen floor speeches in addition to national media appearances.
Courtney gave another student loan speech on Friday, moments after the bill passed. For this one, he slapped a "defused" label onto his usual prop, a "Ticking Timebomb" poster that had counted down the days to the rate hike.
"Now we are officially defusing the bomb that would have exploded with a higher interest rate if we had not acted," Courtney said. "We saw today an honest compromise, people coming together to make sure that the lower rate was going to be extended."
The compromise was focused on how the federal government will pay for the $6 billion needed to keep the low rate for another year. House Republicans initially sought to pay for it by cutting from a preventive care fund that's part of the 2010 national health care law. But Democrats wanted to cut oil companies' tax breaks or raise Social Security and Medicare payroll taxes on some high-earners.
The final bill makes changes to pension laws in a way that creates more federal revenue. It also sets a new time limit: Subsidized Stafford loans are available to students only for up to six years of work on an undergraduate degree.
"I think that's a good fiscally conservative reform," Courtney said in a phone interview. "I think that's something the taxpayer could appreciate. We don't want to enable people to overstay their time."
One major difference between the final bill and Courtney's first proposal is the length of time for the 3.4 percent rate extension. Courtney wanted it made permanent. But the approved version is for one year, so Courtney said he will be keeping his "Ticking Timebomb" sign just in case he needs it again next year.
"We'll dust it off if we have to," he said.
Portions of an Associated Press report were included in this article.