The House of Representatives passed a bill that will reduce student loan interest rates, in a bid to make higher education more accessible for American students .
Subsidized federal student loans currently have an interest rate of 6.8 per cent and the College Student Relief Act 2007 is looking to cut this amount to 3.4 per cent over a period of five years.
The bill is needed to amend the Higher Education Act 1965 by lowering student loans interest rates.
However the lower rate will not be fixed until it has been signed by President Bush and will be effective from July.
The bill, introduced to the House by George Miller, chairman of the House of Education and Labor Committee has the full backing of university officials who say it comes at a time when student debt is on the increase.
In a letter sent to Miller, UC President Robert Dynes gave his support for the bill by saying, "We fully agree with you that our nation’s economic competitiveness depends on having the best-educated workforce possible and that an investment now in postsecondary education will yield higher individual and societal benefits later."
What are the direct implications of the bill? A federal undergraduate subsidzed loan and federal direct Stafford loans will have their interest rates go down each year until the rate expires at the end of 2011.
However Democrats in the House want further legislation for the rate to be made permanent.
According to UC officials, the bill will have a huge impact on undergraduate students in the UC system as students get into heavy debt during their time at university.
On average 7,171 UC Berkeley undergraduates took out subsidized loans in 2005 averaging out to $3,800 each student, according to campus financial aid director Cheryl Resh.
Resh said, "This is a great first step in students continuing to have access to higher education. It would make a major difference as students get ready to pay back their loans, and (would) hopefully help students believe that they can really afford to go to school."
House Passes Bill to Lower Federal Loan Rates
Fri, 19 Jan 2007
content
Find a college:
(e.g. Washington, Idaho, Ohio)
| College news |
|---|
| House Passes Bill to Lower Federal Loan Rates - Fri, 19 Jan 2007 |
| More News |