[Vision2020] UI Reacts to Potential Change in Loans

[Tom Hansen]

>From today's (January 19, 2007) UI Argonaut -

HR 5, the College Student Relief Act of 2007, will benefit middle and lower
income families, ultimately making a college degree financially less
burdensome.

Representative Bill Sali, who continues to be inaccessible to the citizens
of Idaho from his website at http://sali.house.gov/, voted against this
bill.

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UI reacts to potential change in loans 
Written by Sean Garmire -Argonaut  
   
Friday, 19 January 2007  

Students digging themselves into holes of debt may have been handed a step
stool Wednesday.

A bill passed by the House of Representatives would halve interest rates on
need-based federal college loans incrementally over the next five years. The
change would apply to loans made after June 30, 2007. 

The House voted 356-71 in favor of the College Student Relief Act of 2007,
which will affect more than 5 million students across the nation. 
"This is going to be a very positive step for (University of Idaho)
students, in that it'll lower the cost of student loans," said Dan
Davenport, director of admissions and financial aid.

Davenport said the bill will also serve to slow down the profits for
student-aid lenders by increasing fees for corporations like Sallie Mae,
Student Loan Corp. and Nelnet, which provide federally guaranteed student
loans. 

"They're making hundreds of millions from students, and the House is saying,
'We're going to slow down these profits,'" Davenport said.

The White House is opposed to the legislation, arguing that decreasing loan
interest will force a rise in university fees. Democrats say more needs to
be done to make college more affordable, and say reducing student loan rates
is a significant step toward tuition relief.

The loan cut has come at a crucial time for many low-to-middle income
undergraduates. In Idaho, the State Board of Education approved an increase
in student fees of 9.5 percent in 2006. Tuition rates have risen steadily at
UI, 116 percent in the last 10 years, and nationally tuition at four-year
universities has seen a 41 percent rise - after inflation - since 2001. 

Karina Hernandez, a UI senior majoring in child development and family
relations, sat in line in the Student Financial Aid Services Office with her
3-year-old daughter. She has been attending the university since 2001 and
has one more semester before graduation. 
Hernandez is hopeful about the interest cuts. 
"I have one more semester before I have to pay (my loans) off," she said. "I
have a family now, and this means I won't be paying as much."

The legislation, if enacted, will cut interest rates from 6.8 percent to 3.4
percent from 2007 to 2012 in five steps: from 6.8 percent to 6.12 percent,
5.44 percent, 4.76 percent, 4.08 percent and 3.40 percent. The cuts will
save student borrowers, with an average of $13,800 in need-based student
loan debt, $4,400 in interest. 

According to an AP report, the legislation would cost taxpayers about $6
billion which a proposed House bill may aim to reduce by reducing the
government's guaranteed return to lenders that make student loans, cutting
back the amount the government pays for defaulted loans and requiring banks
to pay more in fees. 

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Seeya round town, Moscow.

Tom Hansen
Moscow, Idaho

"Forty percent of the mass of every tree in the forest is crude oil.  Stop
and think about that.  We call them fossil fuels because they used to be
live stuff . . . now in the ground is turned into crude oil." 

- Bill Sali (September 21, 2006)