Students protest interest
By Ben Baynton, staff writer
Posted on January 18, 2006

Last Thursday, a rally was held in Washington, D.C., in support of House Resolution 5, a bill that would reduce the interest on federal student loans. The bill is scheduled to be voted on Wednesday by the House as part of the Democrats’ 100-hour legislation plan.

“We hope to get back to the point where federal grants will pay for most of college,” said Rebecca Thompson, legislative director of the United States Student Association.

The rally was sponsored and run by a coalition of higher education lobby groups, including the U.S. Public Interest Research Group. Attending the rally were Rep. George Miller, D-Calif. and Sen. Edward Kennedy, D-Mass., among other Democratic congressmen. Both spoke and pledged their support to decreasing the cost of higher education.

Funding for higher education has become a partisan issue. Last year, $12 billion was cut from student loan programs in the Higher Education Reconciliation Act by a majority Republican Congress.

“Having a high debt load can affect your career choice,”  said Luke Swarthout, a higher education advocate for PIRG. “American competitiveness will be linked with the rate of education in the populous.” 

If H.R.-5 passes, the money necessary for cutting the interest rates would be taken out of federal subsidies for student loan companies. According to the Campaign for College Affordability, this would cut the cost of college by $4,420 for the average borrower starting in 2011. Current students would benefit by saving $2,280.

Not everyone believes that this is the best way to help higher education.
 
“We think this is robbing Peter to pay Paul,” said Kevin Bruns, Executive Director of America’s Student Loan Providers. The ASLP fears that further cuts in federal subsidies to loan companies could hurt the current loan system, and question the amount of money students would save.

“All of them assume that the interest rate will stay at 3.4 percent, ” Burns said. “It could go back to 6.8 percent in 2012.”

While some may be unsure as to the effectiveness of the legislation, others see it as the beginning of something much bigger.

“H.R.-5 is just a first step,” Swarthout said. “It must be followed by increasing the Pell Grant.”

Swarthout, and others, hope that this Congress will continue to support increasing allocations for higher education.

“We’re deciding if the American dream is still a reality,” said Anne Thompson, communications associate at the Campaign for America’s Future.

Most, however, are unsure as to the future and effects of the bill if passed.

Lisa Tumer, director of financial aid at JMU, said, “It’s too early to tell what is going to happen.”