site.btaParliament Caps Interest on Student Loans at 3%

The National Assembly on Thursday adopted at first and second readings in a single sitting amendments to the Student and Doctoral-Candidate Loans Act to cap interest on such loans at three percentage points. 

The bill was submitted by MP Gabriel Valkov of BSP – United Left and a group of MPs. It provides that the interest rate payable by borrowers to banks may not exceed three percentage points, down from the previous ceiling of seven percentage points. 

The amendments were backed by 176 MPs, with no votes against or abstentions. Velichie's Parliamentary Group did not participate in the vote. 

Lowering the interest rate could significantly increase young people’s interest in student loans, as more affordable financing would also encourage more people, particularly students from lower-income families, to pursue higher education, Valkov said while presenting the bill’s motives.  

Maria Ilieva of Velichie criticized the changes, arguing that they represent interference by the National Assembly in the operations of private banks by effectively ordering them to reduce interest rates. In her view, the proposal is largely populist.