Congress moves to cut college loan costs

Foudn an interesting article via the Chistian Sciene monitor that explains how the new congress' promise of making it more affordable to go to college is getting watered down. It seems that the tagline of "cutting interest rates in half" is onlyhalf of the story as the bill seems now.

There is critisiscm that the watered down version about to passwill not help students until after they graduate, and that more should be done to make it more affordable to enter college. Some say that the interest cut only helps those after they graduate and the cheaper loan rates are now set to be phased in over 5 years.

Perhaps student loan consolidation will still be a money saver for years to come. It also seems that there is an expiration on the new deal and that the hlaf price interest rates are only temporary. It will be interesting to see what the final law is when and if signed.

From the Christian Science monitor (excerpt):

But the bill, unveiled by House Democrats on Friday and scheduled for a vote Wednesday, is scaled back from the initial promises – affecting only the subsidized Stafford loans designed for middle- and lower-class students and phasing the cuts in over five years. Already the proposal is under fire, not just from Republicans, but from some student-aid experts as well.

snip

Even though the lower interest rates could add up to more than $4,000 over the lifetime of a typical graduate's loan, that would mean monthly payments only dropped by about $30.

Congress "would be better off spending [the money] on something else, like increasing the Pell Grant" offered to the neediest students as aid that graduates don't need to pay back, Kantrowitz says. The limit that each student may receive from the Pell Grants program has been frozen for five years now.