House votes to cut student loan interest rates by from 6.8 percent to 3.4 and increase grants for poor student by $890 by 2011 [AP]

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  1. timmus says:

    What’s the catch?

  2. Maurik says:

    you still have to pay taxes? ^^

  3. bohemian says:

    I want to know when they are going to address some of the crazy practices in loan payments, collection fees charges if you default and the free for all in collection practices.

    People are getting “collection fees” exceeding the face value of the loan. The dept of ED seems to be letting anyone who claims to be a collection agency get a hold of student loan files and there is little people can do about it.

    The percentage max payback is a good start. But I know so many people who have had student loans get out of control more because the process is so screwed not their refusal to pay.

  4. jdsmn says:

    So I just graduated this spring, and payments on my $35K of student loans start soon – am I SOL? Is this something that has no benefit to persons like myself, only new students?

  5. Ben Popken says:

    @timmus: The catch is that it won’t be implemented till 2011.

  6. timmus says:

    I hope that’s all it is… I plan to finish out my degree in a couple of years, so any news like this is good news. My wife thinks she overpaid her student loans and can’t get Sallie Mae to give her any information — she said she’s called to get her balance but the Indian droids refuse to give information and start pitching mortgages. The system needs an enema.

  7. trecool95 says:

    The interest rates on my wifes student loans are so high that she pays about $500 a month with less than $100 actually going towards the principal. Unfortunately this is because of consolidation through Citibank and no other financial institution will touch the loan so she can get a lower rate.

  8. amalgamator says:

    too bad it doesn’t cover graduate students…

  9. MameDennis says:

    Well, it’s a move in the right direction. I wish this would kick in soon enough to help my students start their lives under less extreme financial pressure. Some of these people are graduating with 100K+ of debt. Of course, they will still have a healthy chunk to pay off by 2011, so I guess they get to reap *some* advantage from the reduction.

  10. forever_knight says:

    @trecool95: if it’s worth her time and money, have her take a class, take out an education loan to pay for it, then consolidate with another company. educational loan company has a nice incentive package.

  11. alpha says:

    Man, that $890 suuure will go far.
    I bet Congress had to scrimp and scrounge to figure out how they could ever POSSIBLY afford to come up with just a hair under a cool grand in the next 4 years…

    OR, it’s supposed to be million/billion and this is just another lovely Consumerist Typo ™.

    I’m too lazy to click through to the original article to find out.

  12. The Walking Eye says:

    @trecool95: Wow, how much did she take out and how bad was the interest? Cause it sounds to me that she’s either got a ton of loans w/ a long pay off period, or she got absolutely hosed when she consolidated. However, if she had personal loans, rather than the standard Federal, then they may have screwed her that way as well.

    I consolidated about $25K with Citibank over 20 years and got a 3.25% interest rate when I graduated 5 years ago with a terrible credit history. If I’d had a job at the time, I would have done 10 years though.