Norton Alerts Parents and Students to Saturday Deadline for College Loan Savings- June 29, 2006
Norton Alerts Parents and Students to Saturday Deadline for College Loan Savings and Friday Deadline for D.C. Scholarship Programs
June 29, 2006
Washington, DC— As interest rates are scheduled to increase dramatically in two days on Saturday, July 1st, Congresswoman Eleanor Holmes Norton (D-DC) today called urgent attention to an important deadline for students and parents to save money on college loans. Norton urged D.C. families to act fast to consolidate their outstanding federal college loans in order to avoid interest rates on student loans that are expected to rise to more than 7 percent—the highest rate in six years. Student borrowers who consolidate before July 1st may be eligible to lock in a rate as low as 4.75 percent, saving the typical undergraduate borrower almost $3,500 over the life of his or her loan. “Public and private college tuition costs have escalated at alarming rates over the past five years,” Norton said. “Much of the burden has been passed to students themselves, who carry tuition loans for many years. Students and parents will want to act quickly to mitigate costs by locking in the lower rates to keep a college education as affordable as possible.”
Nearly two-thirds of students attending four-year public colleges now take out college loans, according to the Center for Economic and Policy Research, compared with less than half of students in 1990. As tuition costs have increased dramatically, the typical student now graduates with $17,500 in debt, the price of keeping up with spiraling tuition costs.
Despite this sobering situation, earlier this year, the Republican-controlled Congress – over unanimous Democratic opposition – approved a budget-cutting bill that slashes $12 billion out of federal student aid revenue that will not be available because of tax breaks for the wealthiest Americans. This was the largest single cut to federal student aid programs in history. Norton said, “It is plainly shameful that Congress has chosen to push higher education even further out of reach at a time when millions of American families are already struggling to pay tuition bills, and many more young people are being shut out of college because they can’t afford it.”
Norton’s own District of Columbia College Access Act which resulted in the D.C. Tuition Assistance Grant Program (DCTAG) has been softening the blow of higher tuition costs since it was passed in 1999. The program gives D.C. students up to $10,000 annually--which is more than the cost of most public colleges--to attend public colleges or universities in the United States or to receive $2,500 annually to attend certain private colleges and universities in the region or private Historically Black Colleges and Universities (HBCU) throughout the country. Norton is pressing to have the program reauthorized for another five years to assure its continued existence. Earlier this month, she won House passage of a $2 million increase for DCTAG, raising total funding to $35 million.
An even more pressing deadline is facing D.C. students. They have until tomorrow, Friday, June 30, to apply for DCTAG and two other District of Columbia college grant programs for the 2006-2007 school year. These programs are administered through the State Education Office at (202) 727-2824 or www.seo.dc.gov.
Information on federal loan consolidation is available at the Department of Education at 1-800-557-7392 or www.loanconsolidation.ed.gov. Recipients of bank-based loan can contact the companies that own or service their loans. Students also can go to the Norton web site at www.norton.house.gov for details on D.C. and federal college tuition programs.