House Cuts Deep from Student Loan Program

WASHINGTON – The House voted overwhelmingly last week to cut $19 billion in federal subsidies form the guaranteed student loan program and to cut interest rates on Stafford and other federally subsidized loans in half, from 6.8% to 3.4%, over the next five years. The House bill would use the funds to boost college aid by $18 billion over the next five years. Under the bill, student borrowers would never have to pay more than 15% of their discretionary income on loan repayments, and borrowers with economic hardship could have their loans forgiven after 20 years. The bill would provide tuition assistance for graduates who go into public service and undergraduates who agree to teach in public schools. A similar bill is making its way through the Senate.