Just read the actual text of the legislation - it applies to undergraduate students only.

However, the argument stated above that the interest rate drops for five years "and then what?" doesn't seem to make much sense. Assuming that the rate drops to 3.4% for 5 years and then returns to 6.8% after that is still a significant savings for students. Would you rather pay 6.8% for ten years or 3.4% for 5 and 6.8% for the other five? I'd take the latter... if I was an undergraduate student.

Okay, many of you are mistaken by your lack of knowledge. T.H.E. is a non-profit lender who gives back to students. Look at their website for the statistics. How many other for-profit lenders can do this? They are concerned for a reason. The interest rate cuts are only on the Subsidized (interest paid by the government while you are in school) Stafford loans for UNDERGRADUATE students - not us graduate level students. This interest rate cut only last 5 years and then what? Rates go right back up. The interest subsidy cuts to lenders mean that they will not be able to offer you the interest rate incentives that they are offering now. No interest rate reductions means that we have to pay more interest on our loans.

After reading a number of different outlets, this seems like a very cosmetic bill that comes at a very suspicious time- campaign time.

It cuts it for five years, and then what? Also, it looks like it is weighted heavily towards undergraduates-where tuition is the lowest. Is this right? Can someone confirm what i'm reading?

So...if what i see is right, the big dogs will survive, with profits cut?

When profits are cut at a profitable corporation, that seems to just cause more issues. The CEO certainly doesn't just take a pay cut. My bet is that we the students feel the pinch.

See, this is what politicians do. This is what I don't like they grandstand at VERY opportunistic times and start pointing fingers.

"College is too expensive!" Why not run on the platform that babies are cute?

College is ALWAYS too expensive! Why not go to the schools who charge the tuition (mostly state run,) and lower tuition? Oh wait, that wouldn't be profitable enough for the government. :)

They are hoping us students remember this next November, but there will be no time to judge if its actually working, so they can just pat themselves on the back while campaigning by saying they care about students.

I'm not fooled. I don't think lenders are right either. This is another one of the United States new cavalcade of Hobson's choices. (ie: pick your poison.)

This bill is GREAT for students - it cuts the rates on Stafford and Grad Plus loans and reduces subsidies currently being pocketed by third-party lenders. When I worked down in Congress my org. was really behind this bill; it's good for students, good for taxpayers, but bad for banks. Make up your own mind, but I'd recommend against sending a letter to your Rep until you get the full scoop. Here's a good link: http://www.mtv.com/news/articles/1564563/20070711/id_0.jhtml

I'd been hoping for a while that this law would get passed before I went back to school. Alas, no such luck. Maybe I'll benefit from it next year.

I agree with everyone else. Please read up on what the legislation actually says first. I also thought THE was one of the less aggressive lenders, but apparently I was wrong; they're assuming that we grad students are stupid enough to blindly take THE's side without doing our own research first. The student loan industry has generated a lot of press lately, much of it negative. This misleading "story" is just one more example why much of the criticism is deserved.

http://www.nytimes.com/2007/07/12/washington/12loan.html

From yesterday's Times ...

I agree with those who have commented that this issue of the Ramen Report lowered their opinion of T.H.E. as a lender. Of course it is natural to be self-interested, but to advocate that students write their congressmen without providing more complete and balanced information is suspect at best.

As a graduate student, I believe the student loan industry needs reform, and much has come to light recently. The New York Times ran an interesting article dealing briefly with the subject back in May entitled "Whistle-Blower on Student Aid is Vindicated." I am disappointed in T.H.E and the creators of the Ramen Report, who appear to believe that the students they lend to are not politically informed, and will lobby for them simply because they created an easy-to-use letter template.

Despicable. THE ought to be ashamed.

I've been incredibly impressed with T.H.E. up until this point. The bottom line does appear to be that the congressional action proposed will help students. T.H.E. is asking us to propose to our representatives advocating against lower rates for loans so that they can remain more profitable. Those subsidies are only needed becaue the interest rates are so high.

This is a real sham on T.H.E.'s part.

Student loans are a predatory and underhanded business. I'm surprised and disappointed with T.H.E.'s column on this topic. Manipulative and full of lies and deception. Simply shameful. Goes to show you that all these lenders are pretty much the same.

I'm really disappointed w/T.H.E. for not only their incredibly misleading story, but also for trying to manipulate their customers into lobbying for them. I thought T.H.E. was one of the more benign lenders, but the fact that they would post this story is making me reconsider that. Even President Bush is recommending a $16 billion cut to lender subsidies (the House approved a $19 billion cut). The approved legislation also calls for interest rates to be slashed in half, from 6.8% to 3.4%. I find it appalling that T.H.E. would advertise that this is going to cost students overall.

I knew there must have been a reason they didn't say the name of the bill or link to any sort of independent analysis of it. Thanks to others for figuring it out!

To read the text of this bill, also called The College Cost Reduction Act, visit the library of congress website at http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.02669:

This legislation passed in the House by a vote of 273-149 on Wednesday, July 11th.

This is overall good for students, because it not only increases the amount of money available to undergrad students (we were all there once) in the form of federal grants, it also provides loan repayment for students, including graduate students who who work in public service.

It is disappointing that "The Ramen Report," which sells itself to be a source of student-centered info, is so absorbed in self-interest that they cannot report a truthful interpretation of this new legislation that will ease the loan burden for all of us students.

Confused? Do a simple internet search for recent news on student loans.

Don't email your representative!!! This new law only helps out us, the students.
It lowers the interest that we have to pay.
The reason T.H.E wants you to email your rep is because they won't make as much money!!!

The only ones that seem to be griping are the ones in the student loan industry - the bill essentially reduces subsidies to lenders (bad for lenders) and also reduces the fixed fed rate for student loans (good for students). This is why there's all this news about the Sallie Mae merger being threatened by this legislation; without the subsidies, the company is less profitable.

It would be helpful to include the name of the bill that your are concerned about.
A search of "student loan" at Thomas returns as the top hits HR 1010 and S 576.

On the face of it, HR 1010 and S 576 would appear to be helpful to students because the sponsors of those bills are usually supportive of education and students.

Is there some other bill? an amendment? or something in those bills that contains this provision?

Please clarify! Thanks,
--Concerned

Thanks so much for posting the action item regarding the legislation that may increase loan debt, it's a great way to keep people informed and involved!