Press Release
Interest Rates on Student Loans Drop on July 1
Rate Cut is First Phase of Largest College Aid Expansion in Six Decades; Minority and Low-Middle-Income Students to Greatly Benefit
June 30, 2008
Media Contact: Rebecca Dreilinger (202) 225-8203
FOR IMMEDIATE RELEASE
(Washington, DC) – Today, U.S. Representative Luis V. Gutierrez (D-IL) reminded constituents of good news for many college students and their families: as of Tuesday, July 1, 2008, they may be one of 128,756 Illinois residents who will become eligible for $4,500 in student loans savings.
This cutting of the interest rate will benefit the 6.8 million students nationwide who borrow need-based federal student loans each year. Once fully phased in, this interest rate cut will save the typical Illinois student borrower at a four-year institution more than $4,500 over the life of the loan.
WHO BENEFITS FROM THIS INTEREST RATE CUT?
- Low- and middle-income students and families.
- 6.8 million students borrow need-based federal student loans each year. Once fully phased in, this interest rate cut will save the typical borrower – with $13,800 in need-based student loan debt – an average of $4,400 over the life of the loan.
- Half of need-based federal student loan borrowers have family incomes between $26,000-68,000. [1]
- In 2003-2004, the median income of need-based federal loan borrowers was $45,000. By comparison, in 2004, the overall U.S. median family income was roughly $54,000.[2]
- African-American and Hispanic students and families.
- About 38 percent of African-American students take out need-based student loans each year.
- About 25 percent of Hispanic Students take out need-based student loans each year.
ADDITIONAL BENEFITS
- For the 2008-2009 school year, the College Cost Reduction and Access Act will
- Increase the Pell Grant scholarship by $490 (raising the maximum award to $4,731).
- Provide up-front tuition assistance of $4,000 each year for students who commit to teaching high-need subjects in high-need public schools.
###