Democrat lawmakers want to reduce student interest rates -, Albany News, Weather, Sports

Democrat lawmakers want to reduce student interest rates

January 5, 2007

Albany -- They're quick and convenient. They can also be costly. College loans are a popular option for students paying their way through school. But the bill that comes after graduation can be a headache, especially after interest rates pile up. That may be changing.

A proposal in Congress would reduce interest rates on federal student loans and ultimately cut them in half. Democrats made the pledge, and now that Congress is in session, students are hoping they keep it.

It's the first day of the Spring semester at Albany State University. A room full of students crowd the Financial Aid Office.

Jennifer Henderson is trying to fund her college education.

"I had Hope, lost Hope, I'm working back to get Hope but until then I had to bridge the gap."

The Georgia Hope Scholarship covers tuition and some fees for students. But it doesn't pay the cost of room and board nor those other expenses college students incur.

"Computer, travel, transportation costs, personal costs," Financial Aid Director Thomas Harris Junior explains.

Harris tries to help students receive scholarships and federal grants, or free money. When all else fells, there are always student loans.

"Student loans are a necessary, it's kind of a necessary means to an end," Thomas says.

Just ask Krystle Bell. We found her filling out a loan application. She didn't even want to do it.

"It ends up going on your credit. You eventually have to pay it back and the interests rates are very high."

But wait there may be more 'hope'.

U.S. House Democrats want to reduce student interest rates According to a Public Interest Research Group Report, cutting student loan interest rates in half will save the average working and middle class borrower over $4,000 through the life of his loan.

Students waiting in line for financial aid are all for it.

"I already know I'm going to need some help when I get out of school, so if they want to cut half of it, that would be better for me," says Dalorean Hill.

In addition to student loans, students can qualify for pell grants - that's free money from the government. Right now a student can only receive up to $4,050. A proposal in Congress would increase that amount to $5,100. 

Under the Republican Congress, federal student loans moved up to a fixed rate of 6.8 %. Democrats hope to roll them back to 3.4 %.