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Student Loan Fix Among Congressional Accomplishments

[Jan 10, 2008.]

 

House Speaker Nancy Pelosi can claim a number of achievements to her credit in her initial year as Speaker.

For instance, Congress raised the minimum wage for the first time in nearly a decade, from $5.15 to $7.25 per hour. Congress also approved an energy bill which includes the first uptick in fuel economy standards in more than three decades. In addition, the federal legislature approved lobbying and ethics reforms—the most significant such reforms since the Watergate scandal.

Of most interest to college students, however, is Congress’ work on student loans. The U.S. House halved the interest rates on federally-backed student loans over four years. As a result, interest rates on such loans will drop from 6.8% to 3.4%.

In addition, the House boosted money for the federal Pell grant. That’s the grant that’s awarded to low-income college students. By the year 2012, the rate for the Pell grant will rise from $4,310 per year to $5,400 per year by 2012.

The increase in student aid comes at an important time. Many families are feeling the pinch of ever-rising college costs. In some cases, college graduates opt to forego getting married, starting a family, and buying a house in order to keep up with their student loan payments.

For some students, it can take decades to repay their loans. In fact, current Presidential candidate Barack Obama only recently got out from under his student loan debt.

A number of Ivy League colleges have opted to replace loan programs with scholarships in an effort to relieve the financial burden for middle-class families. However, some observers say that the colleges would be better off reducing the rise in college costs. It’s too soon to say whether such revamped college aid programs will really make a difference in the financial fortunes of college students.

Julie Ann Amos
January 10th 2008

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