House to vote on cutting student-loan interest

The Democrats' proposal to cut interest rates on federal need-based student loans will come to a vote next Wednesday in the House of Representatives.

The proposal - which would cut rates from 6.8 to 3.4 percent - would affect about 3,500 undergrads at Penn.

Making college more affordable was a central theme of the Democrats' 2006 campaign, and the party's newfound majority will likely allow it to push the rate cut through the House.

However, officials at Penn say this cut may not have an impact on making higher education more accessible overall, and that a preferable move may be to increase money available for grants.

"I don't think reducing the interest rate is going to have much of an impact," said Bill Schilling, Penn's director of financial aid. "The concern I would have [is], will that make it harder to get more funding for [federal] student programs like Pell grants."

While increasing the size of Pell grants is on the Democrats' agenda, a mounting budget deficit may prevent lawmakers from achieving this goal, said Maureen Budetti, spokeswoman for the National Association of Independent Colleges and Universities.

"Right now they're really pushing," she said. "I think there will be efforts to get it."

The Democrats inherited a federal budget bloated by the Iraq war, but have proposed increasing the maximum federal grant from $4,050 to $5,100 per year, according to the Democratic National Committee's Web site.

But despite this agenda, John Lipinski, a Political Science professor at Penn, says the Iraq war and the No Child Left Behind Act will likely dominate congressional debate.

"In the grand scheme of things I think [financial aid is] going to be given a little lower priority," he said.

But the Democrats' campaign pledge to cut interest rates in half should pass in the House, he said, as Republicans are eager to show themselves committed to supporting education.

"The Republicans want to choose their battles," he said. "Are they going to want to choose . this? Probably not."

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