Student Loan Interest Cut

On January 17, 2007, the U.S. House of Representatives approved a bill to cut student loan interest in half over the next five years.

Jan. 17, 2007-- The U.S. House of Representatives approved a bill to cut interest on federally subsidized student loans in half over the next six years. The bill was introduced by Representative George Miller (D-CA) and received much bipartisan support, with 124 Republicans joining Democrats for an overall vote of 356-71. (Here's information about how your Representative voted.)

The bill calls for a reduction in student loan interest from 6.8 percent to 3.4 percent over the next five years. According to the U.S. Public Interest Group, this could save students an average of $2,300 over the course of a 15 year loan. The bill is expected to receive support from the Senate as well, where Senator Edward Kennedy has introduced a similar bill that also raises the maximum Pell Grant to $5,100.

The Bush Administration and other critics argue that the bill isn't all that helpful because it doesn't help potential incoming students afford college, and instead only helps those who have graduated. The student loan industry also opposes the bill. For more on this issue, read the account in the New York Times or the Washington Post.

By the way, do you know what the average debt is of a U.S. student graduating from college?

$18,000.

Oh, and if you're interested in reading more about educational issues, check out Barbara Pytel's thought-provoking Educational Issues site on Suite101.com.