Carney: Interest Rates on Student Loans Drop on July 1
Press Release
CARNEY: INTEREST RATES ON STUDENT LOANS DROP ON JULY 1
First Phase of Largest College Aid Expansion in Six Decades Kicks In
July 1st marks the first day of interest rate cuts for student loans, from 6.8% to 6.0%. This is the first step in cutting the interest rate in half by 2011.
"As a former professor and father of five children in public schools, I know that cutting student loans will expand education opportunities for more students and families. I believe all students should have access to a quality education, and cutting student interest rates is a strong step toward making college more affordable," said Congressman Carney.
In September 2007, Carney supported the College Cost Reduction and Access Act (PL 110-84), which makes college more affordable and provides the largest expansion in college aid since the GI Bill in 1944. This legislation was signed into law and provides more than $20 billion in federal student aid over the next five years and begins to lower interest rates on need-based (subsidized) federal student loans from 6.8% to 6.0% on July 1st - making these loans more affordable for millions of low and middle-income students. The July 1st cut is the first step toward halving these interest rates. Between now and 2011, these rates will continue to decrease until they reach 3.4%.
"I came to Congress to make a difference for our families, and cutting interest rates for student loans will bring real results. This is about putting our families first and investing in an education and a future for our students. As a professor at Penn State, I knew many students working extra jobs to pay for schooleven those who qualified for financial aid needed extra income with the rising costs of tuition. July 1st will bring real change for our families struggling with college costs, and help put a college education within the reach of millions of students," said Carney.
Cutting student loan interest rates will benefit the 5.5 million students who borrow need-based federal student loans each year. This initial interest rate cut will save the typical four-year student starting college this fall (with need-based student loan debt) about $2,570 over the life of his or her loan.
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