The new Democratic Congress has placed cutting student loan interest on the legislative agenda, and it's about time making college more affordable made its way onto the agenda.
As Anja Kamenetz explains in her excellently researched book, "Generation Debt," every year students across the nation fall victim to unmanageable student loan debt and are unable to crawl out from under an impending nightmare. In the mean time, loan companies are making a pretty penny off fresh-faced college undergrads, and students are struggling at a time they should be focused on developing themselves.
I will admit that, when I was in college, I was completely clueless when it came to college finances. I signed promissory notes, dutifully showed up for work-study selection, tried to compare the relative advantages of certain loans and attempted to decipher the greater meaning of the bills that so religiously arrived but whose information so reluctantly made its way into my brain. I can only imagine the stress I would have endured had my financial situation been as burdensome as it was for the students Kamenetz profiles in her book.
Here's what Kamenetz has to say about Congress' plans:
"I just got this press release from George Miller, your man on the House Education & Labor Committee. They are planning to cut student loan interest rates as part of the Democrats' "first 100 hours of Congress" gimmick. For some reason, they are doing it in five steps:
'On Wednesday, January 17, 2007, the House of Representatives will consider legislation to cut interest rates in half on federal college loans. Specifically, the legislation will cut interest rates on need-based federal loans for undergraduate students from 6.8 percent to 3.4 percent in five steps: 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 implemented, these cuts will save the typical borrower - with $13,800 in need-based loan debt - approximately $4,400 in interest costs over the life of his or her loan…'"