Loan payback could be less

A rare glimpse of bipartisanship resounded through Congress Wednesday as the House of Representatives overwhelmingly approved a bill to cut interest rates on federally subsidized student loans.\nThe bill, which passed 356-71, aims to slash interest rates nearly in half over the next five years -- dropping them from 6.4 percent to 3.4 percent annually.\nThe bill was a part of the Democrats' first-100-day plan, where they aim to push significant legislation through Congress in hopes of bringing about rapid change.\nIf the bill passes through the Senate and is signed by President Bush, it could affect millions of low- and middle-income families nationwide.\nBut if it took effect, only a small percentage of these families would experience the plan's full benefit. Under the bill's provisions, interest rates of loans will decrease annually until 2012 starting July 1, 2007. But only within the six-month window of July 1, 2011 to Jan. 1, 2012 will rates reach their lowest point of 3.4 percent. The potential law would then expire unless renewed by Congress.\nRecently elected Democratic Congressman Baron Hill, said this is because it is tough to predict what the economic situation of the United States will look like in five years. After reviewing the economic landscape in 2012, Congress could make adjustments to the student loan interest rate and renew the provisions, he said. \n"There is still so much we can do," Hill said, referring to how this bill only covers federally subsidized loans. Subsidized loans are loans provided by the federal government, as opposed to private lenders.\nSome Republican critics of the bill said it does not go far enough in helping students pay for college, saying the root of student debt is caused by rising tuition rates.\n"It's hard to dispute the fact that this bill is helping kids," Hill said. Although the bill's passage in the House might be a small step, he said it was one in the right direction. \nThat direction, he said, will ultimately bring an increase in Pell Grants -- federal grants that do not require repayment given to needy students. In addition, Hill said eventually he wants to make it easier for students who struggle to pay a university's tuition but are not within the current need range for receiving federal aid.\nHill said he was confident that bringing about loan rate cuts for less desperate families was possible but warned that it could take more than a year.\nThe delay in expanding money-saving plans is caused by the new Congress' commitment to reducing the national debt -- which currently hovers around $8 trillion, Hill said.\nIf the bill passes, he said the banks would lose out on the deal because they will be required to pay more in fees under the proposal's provisions.\nThis comes as good news to Debbie Sibbitt, IU's director of Hoosiers for Higher Education, an advocacy group that works to secure increased funds for universities statewide. She said she hoped the government would not take money away from the education sector, creating the illusion that they were actually helping students. \nEven though much of Sibbitt's work includes advocating for funds at the state level, she said the federal move would be welcomed. And with many students receiving breaks if the bill passes, she said this should still not affect what she believes to be the state Legislature's need to allocate more funds to universities across Indiana. \nThe bill seemed popular around IU's campus Wednesday, as students surveyed in the Indiana Memorial Union said they were in support of cutting student loan rates. A bill like this could help the United States recharge its academic atmosphere, said junior Francesca Monn, adding that the country has recently been surpassed by other nations in many research areas.\nAnd for people like senior Tracie Hoppie, the bill's passage was in good faith but just a few years too late.\n"It would have helped me more five years ago," she said.