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WASHINGTON - Today, Rep. Charles B. Rangel joined a majority of House Democrats and Republican in voting to make college more affordable and accessible by cutting the interest rate on all subsidized student loans for undergraduates in half over the next five years, from 6.8% to 3.4%.
"It seems to me that if we want to be a world leader in trade, we have to be a world leader in education. That means helping families and students deal with the risings costs of going to college," said Rep. Rangel. "Cutting interest rates on student loans is only the first step in helping students and families deal with these risings costs."
The College Student Relief Act (HR 5), which passed by a vote of 356-71, cuts the interest rate in half in five steps: from 6.8% to 6.12% in 2007; 5.44% in 2008; 4.76% in 2009; 4.08% in 2010; and 3.4% in 2011. It is fully paid for by making modest reductions in certain lender and guaranty agency subsidies -- efficiency improvements that had been passed in either the Republican-controlled House or the Senate as part of President Bush's 2006 budget, but which weren't incorporated in the budget that became law.
Rangel said that the Democrat-led measure was principally targeted in assisting low- and middle-income students and their families with the most financial need. Congressional figures estimate that 243,396 students in New York could see savings of $2,360 over the life of their loan. Once fully phased in 2011, the bill would save the average four-year college student in New York close to $4,570 over the life of their loan.
"This country cannot afford to see our next generation priced out of the American Dream because of rising tuition and fees at four-year public colleges and universities," said Rangel. "These cuts, fully paid without reducing important services, will help keep this country globally competitive while also fulfilling our commitment to providing economic opportunity for all.
HR 5 now moves onto the Senate, where it must pass before it can be signed into law. }
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