House easily passes scaled-back measure to ease student debtÂÂ
(chicagotribune.com) WASHINGTON — With fanfare and substantial bipartisan support, the House delivered Wednesday on the fifth of six bills Democrats had vowed to quickly pass, voting overwhelmingly to cut the interest rate on some college student loans.
But the bill was much scaled back from House Speaker Nancy Pelosi’s campaign promise to cut all student loans in half.
Instead, the House measure, passed 356-71, applies to the 5.5 million subsidized Stafford loans for students whose families earn $26,000 to $68,000 a year, but it would not increase Pell Grants or student tax credits, as originally considered. The bill sets a five-year phase-in of the interest rate reduction to 3.4 percent from 6.8 percent, but then, after six months at 3.4 percent, returns the rate to the original percentage.
House Democrats called it a first step on delivering some relief to students and their parents as college costs have skyrocketed 41 percent in public universities and 17 percent in private ones, and after college debt doubled between 1993 and 2004, according to the independent U.S. Public Interest Research Group.
[...]
The Bush administration questioned the wisdom of encouraging more loans rather than grants.
“Student debt loads have soared in recent years, and it is not clear that encouraging more loans is a wise course. Instead, the administration would support efforts to direct savings to additional grant support for low-income students,” said a statement from the Office of Management and Budget. (source)
Here is some homework for those that are interested. Find out if this bill mentions anything about the cost of tuition remaining the same (fixed tuition). Lowering the rate is fine, but if costs continue to rise (and they will), it kinda defeats the purpose.
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