Washington, D.C. - Congressman Howard L. Berman (CA-28) announced that starting today, July 1, 2011, the interest rate on subsidized student loans will be cut to 3.4%.  Today’s rate cut is the last of four steps to cut the interest rate in half over four years under the 2007 College Cost Reduction and Access Act, which Congressman Berman supported.  Due to these cuts, the typical student borrower who started college in 2008 will have saved $2,570 over the life of their loan. 

“I am acutely aware of the challenges students in both the UC System and Cal State System are facing right now as significant tuition hikes loom ahead because of the California budget crisis,” said Congressman Berman.  “I do not envy the tough choices lawmakers in Sacramento have been forced to make, but I am happy these students will benefit from interest rate cuts I supported in Congress.  These interest rate cuts will help ease the rising cost of college, and could not be coming at a better time for California students.  I am pleased to have supported this interest rate cut, and remain committed to keeping college affordable and accessible for all people.”

Additionally, due to provisions in the 2008 Higher Education Opportunity Act, today is also the first day new college affordability information will become available to young people and their families on the Department of Education website.  This information will help prospective college students and their families shop for the best value – based on their individual circumstances -- for a college education.  This new information will provide students and their families’ early estimates of their expected college costs, and allow them to estimate the annual and total cost of a college education at the individual colleges or universities they are interested in. 

Congressman Berman has long sought to make college more affordable for students.  In addition to voting for the 2007 College Cost Reduction and Access Act, Congressman Berman supported the following measures when Democrats previously controlled Congress:

•    Increasing Maximum Pell Grant.  Between 2007 and 2010, the Democratic-led Congress increased the maximum Pell Grant from $4,050 to $5,550 (after GOP-led Congresses had frozen the maximum Pell Grant for four years, despite the rapidly rising cost of colleges).  According to the Department of Education, there are 18, 186 Pell Grant recipients in California’s 28th Congressional District for the 2011-2012 academic year.   

•    Income-Based Repayment Program.  The Democratic-led Congress established the Income-Based Repayment Program, which began on July 1, 2009.  This program makes student loan payments more manageable for student borrowers by guaranteeing that borrowers will not have to pay more than 15 percent of their discretionary income in loan repayments.

•    Public Service Loan Forgiveness.  The Democratic-led Congress also established the Public Service Loan Forgiveness Program, which began on October 1, 2007.  Under this program, graduates who enter into public service careers, such as teachers, public defenders, firefighters, nurses, non-profit workers and more, are eligible for complete loan forgiveness after 10 years of qualifying public service and loan repayments.