Proposed house bill aims to protect student finances

By Nicole Donner

As an effort to fight rising education prices, the Reverse the Raid on Student Aid Act of 2006 was proposed in Congress in April.

The bill was proposed to cut interest rates on subsidized loans such as the Stafford loans and PLUS loans after Congress cut $12.7 billion from the federal student-aid programs.

This program was one of many that faced cuts with the bill that was made to fund hurricane relief for Mississippi and Louisiana.

The Budget Reconciliation Act of 2006 was passed in December 2005 by a vote of 308 to 106. The five-year $39.7 billion legislative bill was aimed at providing funding for rebuilding homes, schools and hospitals as well as the reconstruction of bridges and roads.

If the Reverse the Raid on Student Aid Act is passed, subsidized loans can be cut from 6.8 percent to 3.4 percent and parent loans will be reduced from 8.5 percent to 4.25 percent.

The bill’s sponsor, U.S. Rep. George Miller (D-Calf.), was joined by 15 co-sponsors.
According to U.S. Rep. Betty McCollum, D-Minn., one of the bill’s co-sponsors, borrowers will owe an estimated $5,600 in a lifetime of interest payments.

The House Committee on Education and the Workforce has created an online forum where students, parents, college staff and members of Congress can submit comments or video testimony, expressing their feelings about rising education costs.

Students who are paying off loans taken out prior to the Budget Reconciliation Act passing are advised by MHCC’s financial aid specialist Rod Boettcher to consolidate now to save from possible interest rate fluctuations before July 1.

As students wait to see which way the bill will go, several popular loans are on the chopping block.

Despite the dramatic rise, Boettcher continues to recommend students take loans out through FAFSA, (Free Application for Federal Student Aid).

According to http://thomas.loc.gov, the latest major action was April 6, when the bill was sent to the House Committee on Education and the Workforce.

For more information about how to submit your testimony to the Committee on Education and The Workforce, visit http://edworkforce.house.gov/democrats/makecollegeaffordable.shtml.