State PIRGs' Higher Education Project
218 D Street SE
Washington, DC 20003
(202) 546-9707

Director:
Ivan Frishberg

Advocate:
Ellynne Bannon

 

United States Student Association
State PIRGs' Higher Education Project

April 29, 2002

The Honorable C.W. Young, Chairman
House Appropriations Committee
2407 Rayburn House Office Building
U.S. House of Representatives
Washington, D.C. 20515
The Honorable David Obey, Ranking Member
House Appropriations Committee
2314 Rayburn House Office Building
U.S. House of Representatives
Washington, D.C. 20515

Dear Mr. Chairman and Representative Obey,

We were pleased to read about the upcoming lower interest rates for student borrowers, "College loan rates could tumble as low as 4%", in USA Today last week. The article notes that interest rates are expected to fall to about 4 percent in July.

For many students this will be an excellent opportunity to consolidate their loans, lock in a low fixed interest rate, and save several thousand dollars over the life of their loans. As college costs rise and many students and families struggle to finance a higher education, consolidation offers important benefits that make college more affordable. The typical borrower with $16,928 in federal student loan debt who consolidates at a rate of 4 percent would save about $2,800 over the life of their loan. The typical Pell Grant borrower with $18,928 in federal loan debt would save about $3,100.

We understand that some federally subsidized loan holders have suggested raising student consolidation loan interest rates, by changing the rate from fixed to variable. We urge you to oppose this proposal because it would cost students thousands of dollars.

Please accept our gratitude for your leadership and continuing support to make college more affordable for our nation's students.

Sincerely,

Corye Barbour
USSA Legislative Director
Ellynne Bannon
State PIRGs Higher Education Advocate

cc: The Honorable John Boehner, Chairman of the House Education and Workforce Committee
The Honorable George Miller, Ranking Member of the House Education and Workforce Committee