Democrats propose lower interest on some student loans

January 12, 2007

WASHINGTON (AP) -- Following up on an election-year promise, House Democrats said Friday they plan quick action to lower interest rates for student loans.

Their proposal, scheduled for a vote next week, would cut interest rates on some student loans in half. However, the college tuition plan has been scaled back since it was first touted on the campaign trail last year.

The interest rate relief would apply only to need-based loans and doesn't help people who take out unsubsidized student loans -- a distinction not made in the campaign literature Democrats handed out before winning control of Congress last fall. The measure also abandons a pledge to reduce rates for parents who take out loans to help with their kids' college costs.

The rate cut for subsidized student loans -- from 6.8 to 3.4 percent -- would be phased in over five years.

The measure would cost just under $6 billion, according to the Congressional Budget Office.



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This administration has so starved our coffers so badly, we are going to have to cut back on many MANY programs.

Just the way the Rs want it!