The training Department’s suggestion to begin with battery charging a changeable interest in place of a predetermined, low-rate so you’re able to individuals just who merge numerous government student education loans towards the one is a good “viable selection for reducing government will cost you” inside the student loan apps, this new You.S. Regulators Accountability Work environment told you inside a march letter so you’re able to Republican lawmakers, who’d asked the fresh opinion.
The training Department’s proposal to start billing a varying interest rate rather than a fixed, low rate in order to individuals exactly who mix multiple government figuratively speaking into the you’re a great “feasible selection for reducing federal costs” from inside the student loan programs, the brand new You.S. Government Accountability Workplace said in a march page so you’re able to Republican lawmakers, that has requested new feedback.
Within its finances offer on the 2006 fiscal 12 months, the brand new Plant management supported a proposal — to start with submit from the Household Republicans in the laws to give the newest Degree Operate — who does pay for a rise in new Pell Grant System largely due to a few alterations in how a few government student loan programs is actually handled, for instance the shift to help you a changeable rate of interest about system for consolidating finance. Supporters for college students strenuously oppose including a significant difference, and that while you are saving government entities currency will ratchet within the will set you back in order to individuals.
This new GAO given research in that examined various an easy way to keep costs down throughout the loan system, and you may recommended the loan integration alter as a whole opportunity. Agent. John A. Boehner (R-Ohio), chairman of the property off Agencies Panel toward Knowledge and the Staff, expected the new GAO in order to reevaluate the situation to see “if or not monetary activities — such as for example most recent and projected interest rates — is such that a changeable interest rate stays a feasible solution having reducing federal will cost you regarding education loan integration.” The clear answer is still sure, the brand new GAO page states.
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During the a news release regarding the Domestic degree panel, Boehner told you: “It’s time for Congress to help you heed brand new warnings of your own GAO, and you can address the fresh ballooning can cost you of your consolidation loan system — a course that will payday loans Cheraw SC not serve college students, however, large income college graduates. We must repair the main focus of one’s Advanced schooling Operate to the modern and you will coming lowest and you can center-income children it was created to suffice.”
But the House pr release appears to overstate the GAO’s conclusions a while, saying that new accountabilty workplace “will continue to recommend varying interest rates.” As the letter continues to advise that following changeable price try a great “viable choice” to possess reducing federal will set you back, it appears to eliminate well short of recommending that the government in reality take you to definitely step.
A great spokesman for Rep. George Miller out-of Ca, the big Democrat for the Family education committee, told you the Congressman had not heard of GAO page and may even perhaps not comment on they. However, the guy noted a current Congressional Finances Office investigation finding that “continuing to let people the possibility so you’re able to combine its finance during the a minimal repaired price will surely cost $255 million over the next a decade,” far less than the estimate Republicans features considering.
The fresh spokesman extra: “Associate. Miller strongly believes that we need to do everything you can while making college or university more affordable for college students — no less sensible — thus he would not help elimination of the modern lowest repaired rates integration work for.”
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.
