WASHINGTON – Congressman Dale E. Kildee (D-MI) announced today that there is one month left for student loan borrowers in the 5^th Congressional District to consolidate their student loans before interest rates rise on July 1.  Kildee and other House Democrats on the Education and Workforce Committee are strongly urging students and parents to consolidate before interest rates on outstanding loans are expected to rise to their highest rate in six years. Consolidation allows students and parents to combine their separate loans into one and lock in a low fixed interest rate – which could save borrowers in Michigan thousands of dollars over the life of their loans.  

“With rapidly increasing college loan volume, it is critical for students to take advantage of any opportunity available to reduce their debt,” said Rep. Dale Kildee (D-MI), the ranking Democrat on the Subcommittee on 21^st Century Competitiveness.  “Consolidating before July 1 will save students money—potentially thousands of dollars—easing the financial burdens that limit their career choices.”  

Congressman Kildee and other leading House and Senate Democrats have also introduced legislation to cut the interest rates on new college loans in half.  The "Reverse the Raid on Student Aid" bill would cut interest rates 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. 

Each year on July 1, the U.S. Department of Education adjusts the interest rates on outstanding college loans. Interest rates on student loans are expected to rise to just over 7 percent and interest rates on parent loans are expected to rise to 7.8 percent. Student borrowers who consolidate their outstanding loans before July 1 would be eligible to lock in an interest rate as low as 4.75 percent, which would save an average of nearly $3,500 over the life of the loan. Parent borrowers who consolidate before July 1 would be eligible to lock in a rate as low as 6.1 percent over the life of their loan.  The option to reconsolidate would affect over 240,000 student borrowers in Michigan.

House Education and Workforce Committee Democrats are currently hosting an online forum on college affordability, which gives college students, graduates and parents the opportunity to make their voices heard on their experiences with paying for college and on their ideas for how Congress should make college more affordable.

For more information on student and parent loan consolidation information, please visit:

http://edworkforce.house.gov/democrats/studentloanconsolidation.html

For more information on how to participate in the college affordability e-forum, please visit:

http://edworkforce.house.gov/democrats/makecollegeaffordable.shtml

For more information on Democratic legislation to cut interest rates in half on new college loans, please visit:

http://edworkforce.house.gov/democrats/pdf/reverseraid.pdf