Udall Votes To Make College More Affordable By Cutting Interests Rates On Student Loans

UDALL VOTES TO MAKE COLLEGE MORE AFFORDABLE BY CUTTING INTEREST RATES ON STUDENT LOANS

Today, U.S. Representative Tom Udall, D-N.M., voted to make college more affordable and accessible by cutting the interest rate on subsidized student loans in half for undergraduates over the next five years - slashing the interest rate from 6.8% to 3.4%. The bill cuts the interest rate in half in five steps: From 6.8% to 6.12% in 2007; 5.44% in 2008; 4.76% in 2009; 4.08% in 2010; and 3.4% in 2011.

The House passed the bill this afternoon by a vote of 356 to 71.

"This bill is targeted towards assisting the low-and middle-income college students and their families with the most financial need," said Udall.

"In New Mexico, there are almost 21,000 four-year college students with subsidized student loans, all of whom would benefit from this legislation," Udall stated. "Once fully phased in, the bill would save the average four-year college student in New Mexico starting school in 2011 with subsidized student loans almost $4,100 over the life of their loans."

"Making college more affordable is particularly important at a time when the costs of attending college continue to skyrocket," Udall pointed out. "Tuition and fees at four-year public colleges and universities have risen 41 percent, after inflation, since 2001 - putting college out-of-reach for more and more students. Interest rates on student loans have also risen - increasing the cost of college even more."

"Congress must act at a time when financial barriers are preventing millions of young Americans from attending college," said Udall. "Finally, the health of the American economy depends on having a highly-skilled and well-educated workforce. Making college more affordable is key to our nation remaining competitive in the global economy."

Cutting interest rates on student loans is only the first step Democrats will take in making college more affordable. Later this year, Democrats will also increase the maximum Pell Grant scholarship and take other important steps to reduce the financial barriers to a college education.

The bill is fully paid for by making modest reductions in certain lender and guaranty agency subsidies in order to make the student loan program more efficient and effective for students and for American taxpayers.

Udall also pointed out that this bill is supported by dozens of organizations, including the American Council on Education, National Association of Independent Colleges and Universities, American Association for State Colleges and Universities, American Association of Community Colleges, Alliance for Equity in Higher Education, Hispanic Association of Colleges and Universities, College Board, College Parents of America, and the Institute for Higher Education Policy.

http://www.tomudall.house.gov/issues2.cfm?id=12423