Poor Students Pay for Katrina

How do these guys sleep at night?

Here's an interesting take on the budgetary priorities of our elected officials you won't find on CNN. Chairman of the Education Committee calls for deeper cuts? The students interviewed for this article were more than happy to make the sacrifice, a noble gesture. However, it's time for them to get an education.

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U.S. Rep. John Boehner, R-Ohio, chairman of the House Education and the Workforce Committee, said he was happy with increased loan limits for younger students, but concerned lawmakers should have reined in spending further."While my concerns remain, I am pleased that the new grant proposal is targeted to low-income, high-achieving students and particularly those pursing degrees in fields that will help improve American competitiveness," Boehner said.

The five-year, $40 billion budget reconciliation package, which remained before the House of Representatives when it adjourned before the holidays, draws $13 billion of its savings -- the largest share -- from student loan programs.

While the bill includes sweeteners such as reduced fees and increased borrowing limits, in particular for first-year students, most of that money will likely be more expensive for students and parents due to higher interest."The biggest bearers of the shortfalls are students, and second behind them are lenders," said Dominic Yoia, senior director of financial aid at Quinnipiac University in Hamden. For more than two years leading up to consideration of the budget resolution, Congress has worked without success to renew the Higher Education Act, which covers federal student loan programs. A central issue in the debate was the long-static limits on the amount a student can borrow each year.

The cap for first-year students will increase this year from $2,625 to $3,500, and from $3,500 to $4,500 for second-year students.The interest rate for student loans, however, will increase from a current variable rate of 4.7 percent to a fixed rate of 6.8 percent. The rate paid by parents who borrow for their children will increase from a fixed rate of 7.9 percent to a fixed rate of 8.5 percent.
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Can anyone do the math?