As Democrats hit the ground running in the first 100 hours of a new Congress, the AFT was quick to voice support for H.R. 5, the College Student Relief Act of 2007. Sponsored by Rep. George Miller (D-CA), this bill would phase in interest rate cuts over five years for undergraduate borrowers of new subsidized student loans from a fixed rate of 6.8 percent to a fixed rate of 3.4 percent.

Once fully phased in, the interest rate cut is estimated to help ease the financial burden of more than 5.5 million undergraduate students.

AFT legislative associate Jennifer Luciano notes, "We are pleased to be working with a Congress that is clearly focused on helping students and their families gain access and succeed in higher education.  We hope Congress will take the next and equally important step of affording those least likely to go to college the opportunity to do so by raising the maximum Pell grant, which is the foundation of the Higher Education Act, from $4,050 to $5,100."

In a letter written jointly by the AFT and the National Education Association and sent to Rep. Miller, Chairman of the House Education and Workforce Committee, the unions criticized record levels of student debt that have occurred recently. Last year, the Republicans pushed through a $12 billion cut to the student loan program, but retained subsidies for the private loan companies, causing the interest rate to rise. Miller's bill would reverse that.

The bill is facing tough resistance because of its cost. In the Senate, Sen. Edward Kennedy (D-MA.) is expected to introduce a bill that will address interest rates and profits for lenders in the context of reauthorizing the Higher Education Act. [Barbara McKenna]

January 12, 2007