By April Bethea
UNC Charlotte student Jose Posada works between classes to help pay a
mortgage and take care of his 6-year-old child. And like many students,
he took out loans to help pay for his degree in political science.
So
Posada is hoping U.S. House members approve a plan today from Democrats
to cut interest rates in half on subsidized Stafford loans for
undergraduates during the next five years.
On
Tuesday, Posada recruited other UNCC students to sign a petition in
favor of the plan along with other organizers from the nonpartisan
nonprofit Working Families Win. They planned to send the petitions to
U.S. Rep. Robin Hayes, a Republican whose district includes UNCC.
Posada said lowering the rates would make it easier for students to pay for college.
Subsidized Stafford loans now have a fixed interest rate of 6.8 percent.
Under
the House proposal, called the College Student Relief Act of 2007, the
interest rate for first-time borrowers would gradually drop each year
until reaching 3.4 percent in 2011.
That
could save N.C. students who enter college this year about $2,200 over
the life of their loan, according to a new report from the Public
Interest Research Group. The savings would rise to $4,270 for state
students who start college in 2011, the report stated.
For
S.C. students, the proposal could result in $2,360 in savings for those
starting school this year, and $4,580 for those who enter in 2011,
according to the PIRG report.
The
plan has drawn criticism from some banks, which oppose provisions that
would make them pay the estimated $6 billion cost of the lower rates,
and congressional Republicans, who want more pressure on colleges to
reduce costs.
"The
bottom line is that by cutting interest rates ... we're going to make
college more affordable for more middle-class students," said Rob
Thompson, an advocate for N.C. PIRG. "It's hard to argue that that's
not a good thing."
