STUDENT LIFE Bush Proposes Change to Loans By Liz McDonald Hoya Staff Writer

White House officials have proposed an end to fixed-rate consolidations of federal student loans, a change that could require future college students and graduates to refinance their loans with variable interest rates.

If passed, President George W. Bush’s administration’s proposal would prevent student borrowers who want to consolidate their educational loans from securing government-subsidized fixed rates and instead would force them to comply with shifting interest rates.

This proposal, which could generate nearly $1.3 billion in revenue for the federal government, comes at the heels of projections that interest rates will plunge to record lows in the near future, an event that could save student borrowers thousands of dollars on the repayment of their loans.

Sponsored by Budget Director Mitchell E. Daniels, Jr., and House Speaker Dennis Hastert (R-Ill.), the proposal was offered as one of three solutions to the $1.3 deficit in the Pell Grant Program for low-income students. White House officials discussed attaching the end of government-subsidized consolidations to a supplementary spending bill being developed in the House Appropriations Committee.

Currently, the White House General Accounting Office is reviewing the proposal to determine its feasibility.

The proposal, raised at a White House meeting on April 30, immediately garnered criticism from some congressional Democrats and Republicans, who said it would unfairly impact student borrowers.

“At a time when we are looking for ways to make college more affordable, it is inconceivable that the Bush White House would send a proposal to Congress that would make it harder for working families to pay tuition bills,” Sen. Robert G. Torricelli (D-N.J.) told The Washington Post last month.

According to statistics from the National Association of Graduate-Professional Students, more than 50 percent of American college students will graduate in debt, with an average debt of $10,500. In their annual rankings, U.S. News and World Report reported that the average debt upon graduation for Georgetown students is approximately $20,000.

Georgetown University’s financial aid officers did not return calls placed Thursday.