Eshoo Votes to Cut Student Loan Interest Rates
January 17, 2007
WASHINGTON, D.C. -- Congresswoman Anna G. Eshoo, D-Palo Alto, voted for bipartisan legislation Wednesday designed to make college more affordable and accessible by cutting interest rates on subsidized student loans in half over five years.
"Cutting interest rates on student loans is an investment in our country's future," Eshoo said. "By lowering the financial barriers to higher education, this legislation expands opportunities for our young people, giving them -- and us -- a better tomorrow."
According to the Congressional Advisory Committee on Student Financial Assistance, financial obstacles will prevent at least 4.4 million high school graduates from attending a four-year public college over the next decade.
H.R. 5, the College Student Relief Act of 2007, will reduce the financial burden on undergraduates by cutting interest rates from the current 6.8 percent to 3.4 percent over five years. The relief is targeted to those who need it most ... students and families making between $26,000 and $68,000.
"Once the full rate cut is in place, a typical borrower in California with $15,125 in subsidized federal student loan debt will save approximately $4,830 over the life of their loan," Eshoo said.
Eshoo said the legislation is fiscally responsible because the interest rate cuts are entirely paid for through adjustments in lender rates, participation fees for financial institutions and collection fees for defaulted loans.
The House passed H.R. 5 by a vote of 356 to 71.
Eshoo's full statement, submitted for the record, is below:
"Madam Speaker, I rise in strong support of H.R. 5.
"In today's increasingly competitive economy, a college education is more important than ever. That's why it's essential for us to ensure that anyone who has the desire to receive a higher education has the opportunity to do so. Higher education shapes citizens as well as the future of our country.
"Today escalating college costs and legislation passed by the Republican Majority in 2006 are creating insurmountable barriers across the country for students to afford a college education. According to the Congressional Advisory Committee on Student Financial Assistance, financial obstacles will prevent at least 4.4 million high school graduates from attending a four-year public college over the next decade. This is an inexcusable waste of our most valuable resource, the young people of our country.
"H.R. 5 will lower these barriers, cutting interest rates in half over the next five years for undergraduate students with subsidized student loans. This relief is targeted to reach those most in need...students and families making between $26,000 and $68,000. When fully phased in, this legislation will save the typical borrower in California with $15,125 in subsidized federal student loan debt approximately $4,830 over the life of their loan. All told, this legislation will provide students with $5.5 billion in financial relief and is entirely paid for through adjustments in lender rates, participation fees for financial institutions and collection fees for defaulted loans.
"I urge my colleagues to join me in supporting this legislation. By doing so we will take an important step to improve access to higher education across the country as well as helping to relieve the burden on middle class families across the nation."
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