Ledger

In the latest round of good news for cash-strapped college students, the House of Representatives voted last week to cut subsidized Stafford Loan rates in half beginning in 2007.

After passing 356-71 in the House of Representatives, the bill to cut interest rates from the current 6.8 percent to 3.4 percent moves into the Senate this week. If passed, students in Washington State – the nation’s sixth largest borrower of federally funded Stafford Loans – can possibly shave thousands of dollars each off their college debt load.

Escalating rates have left Washington State students with an average subsidized Stafford Loan debt of $14,594 upon graduation, according to the U.S. Public Interest Research Group. The House’s plan will save the average Washington student beginning college in 2007 a total of $2,410 dollars if they attend school for four years.

The plan calls for easing the rate on subsidized Stafford Loans by .68 percent each year until 2011. The bill’s total cost is estimated to be $6 billion, and is to be funded by decreasing federal subsidies to loan providers.

Lenders are in obvious opposition to the bill, arguing that Congress already imposed a $12 billion cut in subsidies last year. However, senator such as Edward M. Kennedy, D-Mass., is quick to point out that lenders already bank enough capital from students.

"The two things that are the most profitable industries in this country today are credit cards and student loans," he said at a news conference. He also pointed that Sally Mae’s shares have risen drastically in recent years, owing to the aforementioned point.

A majority of Washington State’s delegation in the House, including Norm Dicks, D-Tacoma, voted yes to the bill.

If the bill makes it through the Senate, it would be cause for yet another celebration among Washington students. Governor Christine Gregoire’s unveiled her budget Dec. 19, making education a priority. Higher education will receive a $433.1 million boost if it passes the Democrat-controlled legislature, according to numbers published by the governor’s office.

The largest amount of the governor’s proposal -- $212 million -- will go to increasing faculty salaries. Gregoire also plans to increase enrollment slots across the state, expand eligibility for State Need Grants and establish the Washington Learns Scholarship for low income students.

Based upon Gregoire’s 2007-2009 budget proposal, Huskies are already being promised some extra relief. University of Washington President Mark Emmert decided to temporarily suspend a planned tuition hike of 50 percent for in-state students, owing to a large operating surplus that would result from passage of the budget, according to the UW Daily.

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