The education Department’s offer to start asking a variable interest rather than a fixed, low-rate in order to consumers exactly who combine multiple government student education loans into the you’re a “practical selection for reducing federal can cost you” from inside the education loan applications, the latest U.S. Authorities Responsibility Work environment told you inside the a march page to Republican lawmakers, that has questioned the latest feedback.
The training payday loans Lebanon TN Department’s proposition to begin with charging a variable interest rate unlike a predetermined, low-rate so you’re able to borrowers exactly who combine numerous federal student education loans towards one is a “feasible choice for reducing government will cost you” into the education loan applications, the brand new U.S. Authorities Liability Work environment said when you look at the a march letter so you’re able to Republican lawmakers, who had expected the new feedback.
In its budget proposal into the 2006 fiscal season, the fresh new Plant administration recommended a proposal — to start with submit because of the Family Republicans into the legislation to increase the fresh new Higher education Act — who would purchase a boost in the brand new Pell Offer Program mainly thanks to some changes in the way the a couple of government student loan programs try addressed, including the move so you can a varying rate of interest from the program to have consolidating funds. Supporters for students intensely oppose including a difference, and therefore if you’re preserving the government currency tend to ratchet up the costs to help you consumers.
The fresh GAO provided research for the reason that assessed various a method to keep your charges down on mortgage program, and you may recommended the loan consolidation change as one options. Agent. John A. Boehner (R-Ohio), president of the property out of Agencies Committee towards Training plus the Employees, requested the GAO to help you reassess the challenge observe “whether or not monetary circumstances — such as for example latest and you will estimated interest rates — are in a way that an adjustable interest stays a viable alternative to possess cutting federal will set you back of education loan integration.” The clear answer continues to be yes, the brand new GAO page says.
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For the a pr release throughout the Family studies committee, Boehner said: “It’s time to have Congress to follow this new warnings of the GAO, and you can target the newest ballooning can cost you of your consolidation financing system — a course that will not suffice people, but large earnings university students. We must heal the focus of the Advanced schooling Operate in order to the modern and you can future reasonable and you can center-earnings youngsters it was designed to serve.”
Nevertheless the Domestic pr release seems to overstate brand new GAO’s conclusions some time, proclaiming that the accountabilty workplace “will continue to recommend variable interest levels.” While the page continues to advise that after the adjustable rates was a “viable solution” getting reducing federal costs, it appears to avoid better lacking indicating your authorities in fact capture that step.
A great spokesman to own Rep. George Miller off Ca, the major Democrat for the Family studies panel, said the brand new Congressman had not seen the GAO letter and may even perhaps not discuss it. However, he detailed a recent Congressional Funds Work environment data discovering that “carried on so that students the possibility to combine its funds within a decreased fixed rate will cost $255 mil over the second a decade,” not as than the estimate Republicans has provided.
The newest spokesman additional: “Representative. Miller highly believes that we must do that which you you can easily and also make college cheaper for college students — not less affordable — therefore he’d not assistance elimination of the present day low fixed rates consolidation work with.”
Doug Lederman
Doug Lederman is editor and co-founder of Inside Higher Ed. He helps lead the news organization’s editorial operations, overseeing news content, opinion pieces, career advice, blogs and other features. Doug speaks widely about higher education, including on C-Span and National Public Radio and at meetings and on campuses around the country, and his work has appeared in The New York Times and USA Today, among other publications. Doug was managing editor of The Chronicle of Higher Education from 1999 to 2003. Before that, Doug had worked at The Chronicle since 1986 in a variety of roles, first as an athletics reporter and editor. He has won three National Awards for Education Reporting from the Education Writers Association, including one in 2009 for a series of Inside Higher Ed articles he co-wrote on college rankings. He began his career as a news clerk at The New York Times. He grew up in Shaker Heights, Ohio, and graduated in 1984 from Princeton University. Doug lives with his wife, Kate Scharff, in Bethesda, Md.