CONGRESSMAN CUELLAR ANNOUNCES INTEREST RATES REDUCTION FOR STUDENT COLLEGE LOANS; PROGRAM BENEFITS TENS OF THOUSANDS IN SOUTH TEXAS
Washington, D.C. – Today, Congressman Henry Cuellar announced the benefits of a college loans reduction program that makes student loan payments manageable for millions of Americans, including tens of thousands in the 28th Congressional District. This includes cheaper interest rates on need-based federal loans, affordable monthly payments, and higher Pell Grant scholarships that cover the average tuition at public universities.
Starting Wednesday July 1, 2009, interest rates on student loans will drop from 6 to 5.6 percent. This interest rates reduction is part of the College Cost Reduction Act of 2007 that Congress passed with Congressman Cuellar’s support two years ago. The legislation invested $20 billion in college aid for families, at no additional cost to taxpayers – the single largest investment to help Americans pay for college since the GI Bill.
The rates on student loans will continue to drop until they reach 3.4 percent in 2011. In addition, a new income-based repayment plan will cap monthly loan payments at just 15 percent of the borrower’s income, for those who qualify (15 percent of what the borrower earns above 150 percent of the poverty level depending on the size of the family).
“These savings will allow us to keep more money in our pocketbooks. And in these challenging economic times, we all know that every penny we can save is welcomed,” said Congressman Cuellar.
Pell Grant scholarships for the 2009-2010 school year will also be affected, increasing the maximum amount to $5,350 – more than $600 of what was allowed last year. This act also provides up-front tuition assistance – known as TEACH Grants – worth $4,000 to $16,000 a year to students who make a commitment to teach in areas of vital importance to high-need schools for four years following graduation. College graduates who enter the public sector, working as teachers, public defenders and prosecutors, firefighters, nurses, non-profit workers and more, will be eligible for loan forgiveness after 10 years of qualifying public service.
“Living in South Texas, we all know that some of these high-need areas and schools are in our own backyard. What a great way to motivate our students to proceed with a career in teaching or the public service field – one of the most noble, rewarding careers,” added Congressman Cuellar.
More information on this financial aid program may be obtained by visiting www.cuellar.house.gov and clicking on the tab for new student loan benefits information.
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