<p>Concerns mount over higher rates on student loans
[quote]
The Republican-led Congress and President Bush are facing growing anger on college campuses as students and their parents prepare to pay higher borrowing costs because of new changes to federal student loan programs.</p>
<p>Congress narrowly passed a deficit-reduction bill last month that cut $12 billion from student loan programs, which was signed by the president. The new law will slash subsidies to lenders and raise interest rates on loans taken out by parents.
<p>This isn't exactly news, but the reality is that the increases to the PLUS loan rate is going to reduce the borrowing power of parents, since parents need to begin making payments immediately. Students will also lose, but they won't feel the real pain until they graduate.</p>
<p>My advice to everyone: before borrowing, use on line calculators to determine what your monthly payment will be. About the only good news with the higher fixed rates is that it will be easier to project the payments & full cost of the loan.</p>
<p>While I am not sure that this student loan interest rate hike will be a factor in the forthcoming elections, there are many other factors which if played right will give the Congress to the democrats. People generally vote with their pocketbooks and if they're hurting, they'll vote the party in power out the door.
So far I haven't heard any viable alternatives but I am sure they're out there.</p>
<p>Didn't we cover this news already? The bill is a complex one, but it is NOT as one-sided as the sensationalists report it. As everything that comes from DC, abject partisanship focused on the most egregious parts of the bill. </p>
<p>While nobody likes to pay more in interest, a large portion of the hikes are tied to indexes. The same indexes that yielded the lowest rates when Greenspan pushed interest close to an absolute floor. The administration did not deserve credit for establishing then nor do they deserve the current wave of crticism ... entirely. On the other hand, will the people who consolidated at those historically low yield really vote with their pocketbook?</p>
<p>Also, borrowing ability was EXPANDED not reduced and much needed action was FINALLY taken to curb the abuses of a industry that was given free reins for too long. Just google Sallie Mae to get a small insight on the work of a a bunch of thieves. </p>
<p>When it comes to funding of education, this administration has done a lot more than the previous one. However, that was so easy as Clinton/Gore cynically LOWERED the education funding despite record income. For some, filling that dumb lockbox was more important that maintaining the budgets of ED.</p>