New federal law increases amount of college aid available to students

Published: 2007-10-12

WASHINGTON (CNS) -- College students and lending institutions are not likely to heed this advice from Shakespeare's "Hamlet": "Neither a borrower nor a lender be." That's because student loans are a way of life, particularly when tuition at some private colleges has now topped $40,000. And although loans make affording college tuition feasible, they also carry with them the huge weight of future debt, forcing graduates to rethink careers or put off life decisions such as getting married or starting a family. Others hope to sidestep the expense by postponing college or skipping it altogether. But now the federal government hopes to make college more affordable through the College Cost Reduction and Access Act, effective Oct. 1. Catholic higher education officials interviewed by Catholic News Service gave high marks to the legislation because it is aimed at helping more students pay for college and graduate with less debt. It will reduce the interest rates on federal student loans to 3.4 percent from the current 6.6 percent. It guarantees that loan recipients will not spend more than 15 percent of their annual income repaying loans and that loans will be forgiven after 25 years -- 10 years for those in public service.

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