Senate to tackle student loan rates - WALB.com, Albany News, Weather, Sports

Senate to tackle student loan rates

January 24, 2007

Albany--   Lawmakers are working to ease the burden on graduates who leave college with major debt.

The US House passed a student-loan bill that would cut interest rates on subsidized Stafford Loans in half. The rate would drop from 6.8 percent to 3.4 percent over five years.

Albany State Director of Admissions James Cleveland says it's a step in the right direction but some students may have to take out more loans to deal with dwindling Pell Grant assistance.

"The Pell Grant is being slashed every year so the question in my mind is with the Pell Grant where it is right now, meaning that a student will still need to take the same amount of loan out even though the interest rate is much lower. So it could be a levering off on one end but on the other end they've lost," said Cleveland.

According to the College Board, the bill will affect more than 5.5 million Federal Stafford Subsidized Loan borrowers. 

James says to avoid heavy loans, parents need to plan early for their children's education. The bill now moves to the Senate.  

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