Mikulski Co-Sponsors Student Debt Relief Bill - Southern Maryland Headline News

Mikulski Co-Sponsors Student Debt Relief Bill

"College is part of the American dream, it shouldn't be part of the American financial nightmare."

WASHINGTON, D.C. - Senator Barbara A. Mikulski (D-Md.), a member of the Health, Education, Labor and Pensions (HELP) Committee, has joined Senator Edward Kennedy (D-Mass.) in co-sponsoring the Student Debt Relief Act to provide aid to students who borrow loans to pay for their education.

"College tuition is on the rise across America. Our students are graduating with so much debt it's like their first mortgage," said Senator Mikulski. "American families are stressed and stretched. Students are looking for help. We must make access to higher education a priority for everyone, regardless of zip code."

The legislation outlines relief for student debt by addressing a number of critical issues including:

-- Pell Grants: Increases maximum Pell Grant to $5,100.

-- Interest Rates: Cuts student loan interest rates in half - to 3.4 percent for students and 4.25 percent for PLUS (parent) loans.

-- Debt Relief: Caps federal student loan payments at 15 percent of a borrower's monthly discretionary income, and forgives student loans after 25 years.

-- Public Service Loan Forgiveness: Provides loan forgiveness for public sector employees after 10 years.

-- College Tuition Tax Deduction: Extends college tuition tax deduction and increases allowable deduction to $12,000.

-- Consolidation/Reconsolidation: Allows students to reconsolidate loans, repeals the elimination of in-school consolidation.

-- "Exceptional" Performer Status: Eliminates provisions in current law that allow lenders to receive higher reimbursement from the government for defaulted loans than other lenders.

-- Origination Fees: Reduces origination frees in Direct Loan program by 1 percent to track FFEL program origination fee reduction, and gives secretary explicit authority to reduce origination fees (as FFEL lenders have).

The bill was also co-sponsored by Senators Christopher J. Dodd (D-Conn.), Charles E. Schumer (D-N.Y.), Tom Harkin (D-Iowa), Hillary Rodham Clinton (D-N.Y.) and Joseph I. Lieberman (D-Conn.).

Senator Mikulski is one of two federal senators for the state of Maryland. She is classified as a Class III Senator. Senators are elected to six-year terms, and every two years the members of one class-approximately one-third of the Senators-face election or reelection. Terms for Senators in Class I expire in 2007, Class II in 2009, and Class III in 2011.

Ms. Mikulski's website is located at http://mikulski.senate.gov/. Her office can be reached at (202) 224-4654. More biographical info on Ms. Mikulski can be found at http://en.wikipedia.org/wiki/Barbara_Mikulski.

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