Illinois families to pay more for college

"Illinois students and families are getting hit with one of the largest interest rate hikes on student loans ever. Families across the country are pinching pennies so they can afford to send their children to college. They are willing to sacrifice a lot for a college education, but it is getting harder and harder as costs go up and student debt goes up too." -- Toby Chaudhuri, communications director for Campaign for America's Future

[JULY 3, 2006]  SPRINGFIELD -- Illinois students will have to pay $2,351 to $2,828 more in college loans, according to a report released Friday by the research arm of the Campaign for America's Future. College students and graduates will be pushed deeper into debt as interest rates on Stafford loans -- the basic student loan -- rise from 5.3 percent to 7.14 percent on old loans and to 6.8 percent on new loans. The increases were effective Saturday.

Parents who take out PLUS loans to help their children pay for an undergraduate education also face rising interest rates. Rates on PLUS loans increased Saturday from 6.1 percent to nearly 8 percent for existing loans and to 8.5 percent on new loans, costing the average parent nationally an extra $3,000 and $3,953, respectively.

Robert Borosage, co-director of Campaign for America's Future, explained how Congress has carried out a raid on student aid through acts of commission and omission.

"The failure of the current administration and Congress to make college affordable for all qualified students is a disservice to the country," Borosage said. "The Republican leadership has allowed interest rates on student loans to rise, increased the interest rate on loans that parents take out to help pay for their children's education and refused to allow a vote on a bill that would cut interest rates in half on new loans."

The rising interest rates come at a bad time for American families attempting to pay for college. Tuition at the average four-year public university has increased by 40 percent since 2001, and nearly two-thirds of all four-year college graduates now have student loans. Students and their parents are going further into debt, creating a burden that is often unsustainable. Student loan debt already causes 14 percent of young graduates to delay marriage, 30 percent to hold off on buying a car, 21 percent to postpone having children and 38 percent to delay buying a home.

Students and families need relief from rising interest rates on student loans. Sen. Richard Durbin, D-Ill., and Rep. George Miller, D-Calif., responded to the public's concern earlier this year by introducing legislation that cuts student loan interest rates in half. Their legislation would have saved Illinois students and families $5,146 in payments, according to the report released Friday.

A copy of the Illinois student loan report is available at http://ourfuture.org/issues_and_campaigns/
education/loan_rates_rise.cfm.

[News release provided by Toby Chaudhuri, communications director, Campaign for America's Future]