House of Reps Passes Bill to Cut Student Loan Rates in Half
Washington, DC – NAR: The bill will cut interest rates to 3.4 percent over a period of four years. Matheson says the reduction could make the difference for students and families paying for college.
MATHESON: You know - the tipping point out there for one individual or another - it's not the same for everyone, so I think clearly this makes it more affordable than not and hopefully it makes a difference for a lot of people, because if you can't get a college education in this country - in the economy of the 21st century I think you're really at a disadvantage.
NAR: But only students who start borrowing in July, 2007 will benefit from the lower rates. Students already in debt will continue to pay the higher interest rates. Republican Chris Cannon voted against the bill. He hopes cutting interest rates won't harm institutions lending money to students.
CANNON: Certainly lower interest rates for kids who have to borrow money to go through college and that's many kids today. There are two possibilities - one you can try and force the market in which case it do any good for anybody - or two you subsidize and underwrite the cost and that's probably a pretty good idea - so let's see what the Democrats are doing and whether it makes sense or not.
NAR: Cutting interest rates only deals with half of the problem. Tuition continues to rise in public schools throughout Utah forcing more students to go into debt. Those costs are determined by state university regents and Congress can do little to stop tuition from rising. But Matheson says the state does what it can to keep tuition costs down.
MATHESON: While we all would like to college more affordable than it is - I do think people in Utah should take one step back and realize that in-state tuition in Utah is a far better price than most of the other fifty states in the country.
NAR: Up next for the Democrats - a plan to introduce a bill in the coming weeks that would increase the amount of PELL grants available to student who qualify.