Committee on Education and Labor : U.S. House of Representatives

Press Releases

Rep. Miller Introduces Legislation To Cut Interest Rates on College Loans
College Student Relief Act of 2007 Will Make College More Affordable for Students Most In Need at No New Cost to Taxpayer

Friday, January 12, 2007

 

WASHINGTON, DC -- Millions of students across the country would each save thousands of dollars in interest payments under new legislation introduced today by U.S. Rep. George Miller (D-CA) to cut interest rates in half on need-based federal college loans over the next five years.  The House of Representatives will vote on the legislation on Wednesday, January 17, 2007, as part of the Democratic leadership's "Six for 06" package of policy initiatives for the first 100 legislative hours of the new Congress.

The legislation, the College Student Relief Act of 2007, H.R. 5, would cut interest rates on need-based federal loans for undergraduate students from 6.8 percent to 3.4 percent in five steps: from 6.8 percent to 6.12 percent in 2007; 5.44 percent in 2008; 4.76 percent in 2009; 4.08 percent in 2010; and 3.40 percent in 2011. Once fully phased in, these cuts would save the typical borrower, with $13,800 in need-based federal student loan debt, $4,400 in savings over the life of the loan.

This bill will be paid for by making the program more efficient and effective for students and the government - at no new cost to taxpayers.

Miller, the Chairman of the House Education and Labor Committee, said today that this bill would be an important first step towards making college more affordable for students and their families.

"How to pay for a college education has become a primary concern for students and families across this country - a concern that Congress must urgently address as part of our goal of strengthening America's middle class," said Miller. "This legislation will be a vital first step towards helping lower college costs for millions of low- and middle-income students, while keeping our promises to taxpayers to maintain responsible spending."

The bill comes at a critical time for America's low-income and middle-class families. Tuition and fees at four-year public colleges and universities have risen 41 percent - after inflation - since 2001. The typical student now graduates with $17,500 in total federal student loan debt. According to past estimates from the Department of Education, as many as 200,000 would-be students are forced to delay or forgo attending college altogether due to the cost.

Half of the student-loan borrowers who would benefit under this legislation have family incomes between $26,000 and $68,000, according to the Congressional Research Service; the median family income of borrowers was $45,000 in 2003-2004. This is well below the overall U.S. median family income of approximately $54,000, according to the Economic Policy Institute.

"Helping all qualified students pursue higher education is good for our nation's economy, for our competitiveness, for our security, and for our future. In the new Congress, we must continue to do everything possible to address rising costs so that no qualified student is prevented from going to college because of the price," said Miller.

Miller's bill is the first component of Democrats' plans to make college more affordable and accessible - a top priority of the Democratic leadership. Miller today also said that during the 110th Congress, Democrats plan to raise the maximum Pell Grant scholarship, and work with students, colleges, and other relevant stakeholders to examine increasing tuition costs.

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FOR IMMEDIATE RELEASE
Contact: Tom Kiley / Rachel Racusen
2181 Rayburn House Office Building
Washington, DC 20515
202-225-3725