Once again, the cost of attending college might be rising for thousands of students across the nation.
In a bill signed into law by President George W. Bush Wednesday, interest rates on federal college loans taken out by parents, known as PLUS loans, will increase from the current 6.1 percent to 8.5 percent.
The increased interest rates will go into effect July 1.
The bill, known as the Deficit Reduction Act of 2005, seeks to reduce a spiraling federal deficit. It also includes cuts of up to $12.7 billion from various student financial aid and loan programs.
"Spending restraints means making difficult choices, yet making those choices is what the American people sent us to Washington to do," Bush said before signing the legislation, according to CNN.
Congress narrowly passed the bill Feb. 2, with a 216-214 vote in the House of Representatives. Republican members of Congress said the legislation will reallocate funds to address emergency issues, such as rebuilding afflicted areas after Hurricane Katrina.
"Once again, House Republicans are on record as defending budget discipline," said Rep. Roy Blunt, R-Mont.
The bill will slash a total of $39 billion from the federal budget during the next five years and make significant cuts to other programs such as Medicare, Medicaid and farm subsidies.
The night before the bill passed Congress, Bush stressed the importance of education and outlined his plan for the American Competitiveness Initiative-an effort to increase student aptitude in science and math-in his State of the Union address.
Many leaders of student and education groups said they believe that these spending cuts are a step in the wrong direction.
"[The bill] is going to hurt many parents and students," said Tim McDowell, vice president of government relations for the North Carolina Independent Colleges and Universities Association. "In a time where the government should be encouraging students to go to college, [Congress] seems to be discouraging them."
Approximately 800,000 parents take out PLUS loans annually, according to the Department of Education.
For families taking out a standard PLUS loan of $25,000, the additional interest would be $3,000 over four years.
McDowell said diverting student funds to other areas of the budget is unfair.
"Student aid makes half of one percent of the total federal budget, yet it's being called upon to make up 30 percent of the budget of Katrina relief," he said.
Changes in federal student aid and grant policies are not likely to affect most Duke students, said Director of Financial Aid Jim Belvin, when he spoke to The Chronicle in January.
He stressed that the University will meet the financial needs of all students.
"Students will pay a slightly higher level of interest, but I don't see that as putting additional pressure on the University," Belvin said. "I'm not sounding an alarm."
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