1) The Benefits:
The proposals would have borrowers pay no more than 15 percent of their discretionary income for federally backed student loans. They would allow such loans to be forgiven after about 25 years. The Senate measure would gradually boost the maximum Pell grant, the nation's main aid program for low-income students, from $4,300 to $5,400 a year. The House plan calls for a smaller grant increase but would cut in half the interest rates on federally backed student loans, to 3.4 percent.
2) The CostThe Senate version would cut subsidies to lenders by $18.3 billion; the House version would cut subsidies by about $19 billion...[Rep. George]Miller said in an interview that [DESPITE WHAT THEY SAY PUBLICLY], lenders have told lawmakers privately that they could accept the subsidy cuts, which are about the same as reductions President Bush proposed in his budget this year.
2 comments:
I agree with JDM. 15% and 25 years seem way too high, although I guess it's a step in the right direction.
Also, correct me if I'm wrong, but doesn't this deal still allow lenders to keep their obscene profits? For example, it seems like we'll be taking away the $19 billion in subsidies but then giving it right back to lenders to cover any student debt that is over 15% of their salaries or is still left on their balances after 25 years. is this a bogus deal?
all I know is that I am finished grad school and have my consolidation in order. While I have pretty big loans, I also have about 50k at less that 3% interest. That is cheap money - no complaints from me for that.
The 9.75 rate I'm paying on some private loans is a different issue . . . My credit card is better than that.
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