The relationship between the Democratic Congress, college tuition, pell grants and student loans

Currently the Democrats in office have been proposing to cut the interest rate in half on a number of federal student loans, which in the long run will save students thousand of dollars over the repayment term of their loans. Families earning over $160,000 a year, would benefit from a proposal to allow tax deductions for parents for tuition paid. The federal Pell Grant program, would allow lower income families to get additional help from a likely expansion.

In the Democrats’ New Direction for America program, California’s Rep. Nancy Pelosi, who is up to become the next House speaker, has made the affordability of college tuition as one of the many priorities. The projected student loan rate cut is to be established on the first day of the new Congress and is planned to be created within the first 100 hours which the Congress is in session. 

Many experts believe the Democrats student loan interest proposal would persuade college and universities to raise tuition higher than what it is. Anytime they make it inexpensive and trouble-free for students to take out student loans, the overall results would be the increase in cost and interest. 

For the most part, many students will discover that paying for their college tuition most likely will continue to become progressively more complex, in spite of the plans and efforts to make higher education more affordable to students. At a private four year college, the average total tuition and fees was $22,218, an increase of 5.9 percent in the current academic year. In the 1999-2000 academic year, students left school with an average of $16,000 in student loan debt. Now, the undergraduate student graduates school with an average of more than $20,000 in student loan debt. 

The limit which students from lower income families could get from Pell Grant program is $4,050 a year. The Democrats would like to raise the grant to $5,100. 

There was a tax deduction, which terminated last year, which was used to help families who gross up to $160,000 a year, the Democrats would like to bring back to action. The deduction would allow families who pay tuition to deduct as much as $4,000 per year. In addition, the Hope and Lifetime Learning programs also provide tax credits to families with yearly incomes of up to $107,000.

THE DEMOCRATS PLAN 
The newly empowered Democrats in Congress would like to make college more affordable for students. These are the Democrats future plans for college students:
- Cutting the interest rate on federal loans in half. 
- Re-establishing the expired tax deduction for qualified income families paying tuition.
- Increasing the limit on federal Pell Grants to qualifying students. 
- Redirecting most of the savings to the student-aid programs and decreasing loan-distribution costs.

Student Loans 101

Avoid getting in debt with student loans