NEWS ALERT FROM THE DEMOCRATS ON THE U.S. HOUSE EDUCATION COMMITTEE

To: Reporters, editors, producers, and bookers
Date: June 28, 2006

Starting Saturday, interest rates on federal college loans are going up.

What is the news? After Friday, students and parents who take out new loans to pay for college will pay significantly higher interest rates on those loans. Students will pay a 6.8 percent fixed interest rate (up from 5.3 percent), while most parents will pay an 8.5 percent fixed interest rate (up from 6.1 percent).

How many people will this change affect? In 2005, nearly 7 million students took out federal college loans. Any student who takes out a new federal loan after this Friday will be affected by the change. Over 700,000 parents took out federal college loans in 2005. About 75 percent of parents who take out a new federal loan after this Friday will be affected by the new 8.5 percent interest rate (the other 25 percent will also see their rate increase, to 7.9 percent from 6.1 percent).

What are Democrats proposing? Democrats, led by Rep. George Miller (D-CA) in the House and Senator Dick Durbin (D-IL) in the Senate, want to cut these interest rates in half. Students with the most financial need would get an interest rate of 3.4 percent. Parents would all get an interest rate of 4.25 percent.

What have Republicans done? Very little to help families pay for college – and a lot to hurt them. In February, Congress cut $12 billion out of the federal student aid programs – the largest cuts in history.

Why is this news important? The United States is in the middle of a serious college affordability crisis. The typical undergraduate leaves college with $17,500 in debt. Tuition at four-year public colleges has gone up by 40 percent, on average, since 2001. The high cost of college is encouraging fewer students to attend, which hurts the U.S. economy. Students that do attend are often being asked to assume unmanageable levels of debt.

How would the Democratic plan to cut interest rates in half help? Students who take on $17,500 in debt would save $5,600 in interest costs on their loans.

How much would you save on your college loans under the Democratic plan? Visit Democrats’ online calculator to see for yourself.

What are students and parents saying about this? Find out. Visit an online forum sponsored by House Democrats where hundreds of students and parents from around the country have shared their college financing stories.

http://edworkforce.house.gov/democrats/index.shtml

Since their college loans are not set until August, there is no way they can tie in old loan rates. People who have existing college loans can, but those of us sending kids off on loans the first time this fall are out of luck though. Bah.

He used to be my rep , I love him .

I still send him letters and he always
sends me replys .

Rock on :headbang: