Capital Hill Watch
College Student Relief Act of 2007 (H.R. 5)
The U.S. House of Representatives is expected to vote on Wednesday, January 17, 2007, on the College Student Relief Act of 2007 (H.R. 5) [To view the Full Text of the legislation visit: Full Text of Legislation ].
Individuals who take out unsubsidized student loans would not be helped by this measure. The interest rate relief only applies to need – based loans. Also parents who take out loans to help pay their children's college costs would not receive the reduced interest rate.
The measure in a phased reduction over five years would reduce by 50 percent the 6.8 percent interest rate on federally subsidized student loans to 3.4 percent. However such actions would be ineffective and expensive to the federal government costing over five years between $5-$9 billion.
However, subsidies that the government gives lenders would be reduced as well as would be the guaranteed return banks receive when students default on their loans indicate Democrats. Also banks would be required to pay more in fees. This action Democrats have said would avoid increasing the deficit. Yet such reductions could impact the services and benefits students receive and result in fewer students receiving such loans.
Furthermore, such actions occur at a time when federal student financial aid spending has escalated since 2001 400 percent and set to soar are loan consolidations. Interest rates are at historically low rates and recently federal grant and loan limits have increased. Often, tuition increases result from increases in federal student aid which makes college unaffordable for many students. Furthermore, for perspective students college access is not increased by reducing interest rates but merely subsidizes after college loan repayments. Also, an unintended negative consequence could result in that students would be encouraged as a result of the lower interest rates to borrow more. This could put students into deeper debt because they may be encouraged to borrow more money because of lower interest rates.
Counterproductive are federal subsidies and this measure would not enhance college affordability and access. Therefore, different remedies to this problem should be persuaded.
What Can You Do?
Urge your representative to NOT SUPPORT the College Student Relief Act of 2007 (H.R. 5).
Capitol Hill Switchboard Numbers: 202-225-3121 or 202-224-3121 (Those numbers will direct you to the Capitol Hill operator. Ask for your representative's office.)
To go to your representative's website, find his E-mail or to find out who your representatives are... http://www.house.gov/house/MemberWWW.html
To electronically mail your U.S. House of Representative, go to http://www.house.gov/htbin/wrep_findrep.
The Honorable (full name)
United States House of Representatives
Washington, DC 20515
Dear Representative (last name):
to the American Voice Institute of Public Policy Home Page