WASHINGTON, D.C. – In light of high and rising college costs, Congressman Dale E. Kildee (D-MI) today announced legislation to cut interest rates in half on college loans for student borrowers with the most financial need and for parent borrowers. H.R. 5150, the “Reverse the Raid on Student Aid Act,” will make college more affordable for all prospective students and undo the damage that was done to student loan programs when the Republicans passed their budget reconciliation earlier this year.

“The cost of tuition should never stand between a qualified student and a college education, yet today, too many students are deferring or forgoing college because of the high price tag,” said Kildee. “We have a responsibility to invest in America’s economic future by making college more affordable, by giving any student – regardless of socio-economic status – the opportunity to earn a college degree.”

In February, the Republican-led Congress cut $12 billion out of the federal student aid programs in order to help finance tax breaks for the wealthiest Americans when they passed their budget reconciliation bill.  Leading House Democrats introduced a proposal to reverse the Republican aid on student aid by cutting student loan interest rates in half when the House reauthorized federal higher education programs on March 30, but that amendment failed along party lines.

The "Reverse the Raid on Student Aid" bill cuts interest rates in half, from 6.8 percent to 3.4 percent, for students with subsidized loans - which go to students with the most financial need - and from 8.5 percent to 4.25 percent for parents, starting in July 2006.  Under this new legislation, the typical undergraduate student borrower – with $17,500 in student loan debt – would save $5,600 over the life of his or her loan.  This legislation would affect over 240,000 student borrowers in Michigan and countless high school students and their families who are weighing the costs of a college education.

Recent reports indicate that, from 2001 through 2006, the price of tuition, fees, and room and board at four-year public institutions nationwide has increased by 44 percent.  According to the U.S. Department of Education, the average student debt has increased by more than 50 percent over the last decade.