ANGIE PACCIONE URGES COLLEGE STUDENTS AND GRADS TO CONSOLIDATE LOANS
Loan interest rates to skyrocket on July 1, thanks in part to Rep. Marilyn Musgrave’s ties to special interests.
FORT COLLINS—State Rep. Angie Paccione is reminding current college students and college graduates to consolidate their loans before student loan interest rates skyrocket on July 1.
Starting July 1, the interest rate on government-guaranteed loans will increase by 30 to 40 percent because of S. 1932, the so-called “Deficit Reduction Act of 2005,” which actually increased the deficit by $30 billion, and which Rep. Marilyn Musgrave approved in lieu of more comprehensive deficit reduction plans proposed by Democrats in Congress.
All told, the Republican-led Congress has slashed $12 billion from federal student aid programs to help finance $70 billion in tax breaks for the wealthiest Americans.
Sallie Mae—a student loan provider that stands to profit immensely from interest rate hikes—and its employees have contributed $2.7 million to Congress members and congressional PACs since 2002, including $6,000 to Musgrave’s campaigns ($3,000 this year and $3,000 in the 2004 election cycle).
“At a time America is striving to compete in the world marketplace, Marilyn voted to make it vastly more difficult for students to get an education, while making it easier for the rich to get richer,” Paccione said. “Her ties to special interests are not in America’s best interests.”
A bill proposed by Democrats to counter the interest rate hikes, H.B. 5150, would have cut interest rates in half for students with subsidized student loans, and for families most in need. But the Reverse the Raid on Student Aid Act was stifled by Republicans in Congress and failed to reach committee. It would have saved the typical student borrower $5,600.
“We need to balance our budget, but we shouldn’t balance our budget on the backs of our up-and-coming workforce,” Paccione said. “Increasing the burden for our students may help with the deficit in the short term, but there are better ways that won’t saddle Americans with crippling debt. The long-term consequences of Musgrave’s policies will no doubt be disastrous.”
The new rates apply to Stafford loans, taken out by students, and to Parent Loans for Undergraduate Students (PLUS loans).
On July 1, the rate for Stafford loans for students who are in school, grace or deferment will rise from 4.7 percent to 6.54 percent. The rate for Stafford loans in repayment will go to 7.14 percent from 5.3 percent. The rate for PLUS loans will rise to 7.94 percent from 6.1 percent.
Students and their parents can lock in today’s lower rates by converting them to a fixed-rate consolidation loan by June 30. They can find information on consolidating federal loans at http://loanconsolidation.ed.gov/.
“Continuing students, especially, should think about consolidating,” said Paccione, a former college professor at Colorado State University. “Beginning July 1, students won’t be able to consolidate Stafford loans while they’re still in school.”