Gordon Votes To Cut Student Loan Interest Rates

January 17, 2007, WASHINGTON, D.C. – In an effort to make college more affordable and more accessible for many Americans, U.S. Rep. Bart Gordon voted to cut interest rates on student loans in half over the next five years.

“At a time when skyrocketing education costs are putting college out of reach for many students, making college more affordable must be a priority,” said Gordon. “Tuition and fees at four-year public universities have risen 41 percent since 2001, and interest rates on loans have also increased.

“In the face of an increasingly competitive global economy, it is critical to put higher education in reach of more American families. In Tennessee alone, more than 67,000 students will have lower college costs as a result of this bill.”

The U.S. House of Representatives approved H.R. 5, the College Student Relief Act of 2007, today (Jan. 12). The bill now goes to the Senate for consideration.

The bill would phase in a lower interest rate on student loans by annually reducing the current 6.8 percent interest rate until it reaches 3.4 percent in 2011.

According to the U.S. Public Interest Research Group, the average Middle Tennessee State University student starting college this year would save $2,340 over the life of a subsidized student loan. Once the bill is fully phased in, the average MTSU student starting college in 2011 would save $4,530 over the life of the loan.

For the average Tennessee Technological University student starting college this year, the savings would be $2,120 over the life of a subsidized student loan. The average TTU student starting college in 2011 would save $4,110 over the life of the loan.

Gordon said more initiatives to make college more affordable are likely in the coming months.

“Cutting interest rates is a first step to getting college costs under control,” said Gordon. “Later this year, Congress will work to increase the maximum Pell Grant scholarship and take other important steps to reduce the financial barriers to a college education.”