Student loan rate cut proposal

Student loan rate cut proposal
By: Wes Wallace
CAPE GIRARDEAU, Mo. - With many colleges and universities across the nation raising tuition and other fees, it's hard enough for students and their families to pay for college.
"I have loans that I'll probably be paying on till my 30's,"  says Anthony Williams, a sophomore at Southeast Missouri State University.
We caught up with Williams as he was in the Financial Aid office trying to find a scholarship to help with his plans to study abroad in Madrid, Spain. 
Just last week, the US House of Representatives passed the Student Loan Relief Act, to help cut interest rates on certain student loans.  On Monday, Senator Edward Kennedy (D) Massachusetts, introduced a similar proposal in the Senate called the Student Debt Relief Act.
"Basically they mirror each other,"  says Yvonne Moore, the Student Loan Coordinator at SEMO, "If it's approved and signed, Stafford subsidized loans will see an interest cut over the next five years."
Here's a look at how the cuts break down:
  • loans first disbursed on or after July 1, 2007 and before July 1, 2008: 6.12 percent
  • loans first disbursed on or after July 1, 2008 and before July 1, 2009: 5.44 percent
  • loans first disbursed on or after July 1, 2009 and before July 1, 2010: 4.76 percent
  • loans first disbursed on or after July 1, 2010 and before July 1, 2011: 4.08 percent
  • loans first disbursed on or after July 1, 2011 and before Jan. 1, 2012: 3.40 percent
However, the proposal isn't without critics.   They say the plan wouldn't help many students currently enrolled on college campuses, because they'll more than like graduate sooner than the rate cuts will really get going.
So it'll leave students like Anthony Williams waiting for financial aid that may not come in time.  His advice?  "Start in high school, make good grades, and get scholarships so you don't have to worry about student loans."
The Senate's Student Debt Relief Act does include some immediate help.  If approved, it would increase the Pell Grant money almost immediately for the next school year.