Congressman Brian Higgins (NY-27) announced today kicks-off the first of several federal student loan rate cuts authorized by the College Cost Reduction and Access Act. The bill, approved by Congress and signed by the President on September 27, 2007, provides for a gradual decrease in the federal interest rates on subsidized federal Stafford Loans for undergraduates. Today, the federal interest rate dropped from 6.8% to 6%. By July 1, 2011, all undergraduate students awarded a federal loan will receive a fixed interest rate of 3.4%.
“There is no greater investment America can make than an investment in human capital,” said Congressman Higgins. “This law gives people opportunity – opportunity to obtain an affordable quality higher education and the limitless potential that brings.”
Each year, over 5.5 million students take out need-based student loans. The College Cost Reduction and Access Act will provide significant savings for these college students. Starting in 2008, an estimated $2,660 will be saved by the average four year college student over the life of the loan.
The College Cost Reduction and Access Act also includes incentives for students to participate in public service. The law provides loan forgiveness after ten years for public servants, such as military service members, firefighters, nurses or early childhood educators. In addition, the Act guarantees that there is a highly qualified teacher in every classroom by providing up-front tuition assistance of $4,000 each year for those students who promise to teach in high-need public schools upon graduation.
For more information about federal student loans go to: http://studentaid.ed.gov/.