By Brad Atzinger
A Democratic House of Representatives began its push for higher education last Wednesday when it passed legislation that would cut interest rates on need-based student loans from 6.8 to 3.4 percent over the next five years. This measure, if enacted, would alleviate the debt of nearly 5,000 full-time University of Louisville undergraduates who receive federal student loans.
Freshman Billy Garland, a political science major, saw the bill as a step in the right direction for higher education funding. Garland currently receives several thousand dollars from federal loans.
“This lower interest rate would be fantastic,” said Garland, “and I think it’s a wonderful thing the government is doing for students, especially those from lower income families.”
But opponents of this legislation are quick to point out that current students will not benefit from the interest rate slashes. According to Rep. Rob Bishop, R-Utah, and other House Republicans, those who are left out are in need of tuition relief the most.
“To be honest, what it does for my kids in college is nothing. What it does for the friends of my kids in college is nothing. What it does for the students I taught in high school and are still in college is basically nothing, when it could have done so much more,” Bishop said.
Over 42 percent of undergraduates at U of L use either partial or full federal student loans to fund their educations. But Financial Aid Associate Director Michael Abboud said that the impact of the bill would be minimal for current students.
“The impact of this will help students in the long run, but it’s not going to deter or encourage students to borrow,” Abboud said.
According to Abboud, the federal focus would be better placed on increasing the value of pell grants, which are undergraduate student loans that do not have to be repaid. Abboud said the value of the pell grants has remained stagnant over the past few years, and all the while tuition has increased 7-15 percent nationwide.
“The national voice of Financial Aid administrators has been to increase funds for pell grants,” he said.
Nonetheless, Garland said the legislation would be particularly helpful for him, as he will have to take out loans in the next few years to finish funding his U of L degree. The average debt of a U of L student on federal loans is around $15,000.
First year law student Jacqueline Smith also currently takes out loans for her schooling at the Louis D. Brandeis School of Law. Smith said she was excited to hear about the proposed cuts.
“I think it’s great. When you’re first starting out, it’s hard. The less interest there is accruing, the better it is on me,” Smith said.
Smith said it’s been difficult to keep up payment on the interest fees of her loans. “The interest alone for one month is $50,” said Smith, “I haven’t been able to pay for mine.”
The U of L Financial Aid office urges students to learn more before taking out student loans. “The most important thing for students to do at this point is to file their FAFSA and to educate themselves about student loans,” Abboud said.
For more information about student loans at U of L, visit the Financial Aid link on the university home page.
