Johnson's efforts tie bow on holiday gift to students by David Lias Young people who will rely on student loans to fund their higher education found a useful gift in their Christmas stockings, thanks to the efforts of U.S. Sen. Tim Johnson (D-SD).
Johnson told the Plain Talk in a Dec. 18 telephone conference call that the Senate approved his legislation to cap student loan interest rates at 6.8 percent beginning in 2006 and beyond, which will help South Dakotans and other students across the nation pursue higher education.
"Under current law, student loan interest rates fluctuate significantly based on whatever the interest rate markets are," Johnson told the Plain Talk in a Dec. 18 conference call from his Washington, DC office.
Student loans, he said, are capped at a rate of 8.25 percent. "They have come down to around the 7 percent range now, but historically they have been at a higher level," Johnson said.
He said passage of his legislation this year is important because it adds greater stability to student loans.
"This legislation will set a flat 6.8 percent student loan beginning July 1, 2006. That will allow the lenders to better understand what the rates are going to be and take away some of the uncertainty in issuing student loans," Johnson said. "Without this agreement, student loan rates would continue to be unpredictable and out of reach for many students."
A highly educated work force has made the U.S. economy the strongest in the world. To insure that strength, young people must be offered opportunities to pursue higher education in the future.
"We need to make sure that students continue to have access to higher education through an affordable student loan program built on a public-private partnership. This legislation will ensure that interest rates stay at a reasonable, predictable rate," Johnson said.
Johnson's legislation would amend the Higher Education Act to continue the current student loan interest rate formulas. A provision of a bill passed in 1993 would change the current formula for calculating interest rates for new student loan borrowers and their lenders after July 1, 2003.
According to Johnson, that pending change in the formula would have created a more volatile environment in which these rates would be determined and would threaten to undermine the Federal Family Education Loan Program � the guaranteed loan program that serves 80 percent of America's schools and millions of their students.
Johnson's bill eliminates that proposed formula change.
Elementary and secondary
funding receives boost
Johnson also announced Dec. 18 the reauthorization of some components of legislation dealing with elementary and secondary education.
"There's been a lot of compromise back and forth on it, but it does provide additional funding both for special education and for Title I, which is a federal program committed to providing aid to school districts with disadvantaged kids," he said.
Title I funding will almost double nationally between 2002 and 2007 from $13.5 billion to $25 billion. South Dakota's increase in Title I funding hasn't been calculated yet. It likely won't double, but there should be a significant increase, according to the senator's office.
"The proposal also provides mandatory testing for kids in grades three through eight, and that's one of the more controversial provisions of the law, but I am pleased that there is some fairly significant increase in federal funding for K-12 public education in the country," Johnson said.
He noted that approximately 95 percent of funding for K-12 education comes from state and local governments.
"They will continue to be the principal funder of education, but at a time when we are looking at significant financial problems in public education in South Dakota, this more robust federal participation in K-12 education will be a positive thing," Johnson said.
Johnson told the Plain Talk the Senate also approved the Higher Education Relief Opportunities for Students (HEROS) Act of 2001 to provide immediate relief to active duty military members under title IV of the Higher Education Act. Johnson is an original co-sponsor of the bill.
"This will assist students and members of the higher education community in the aftermath of the Sept. 11 terrorist attacks," he said. "It gives the secretary of education the authority to grant waivers to all those active duty military personnel, including reservists, who are then relieved from paying on their student loans so long as they are called up into active duty."
Johnson said the bill also also extends those waivers to family members who lost loved ones Sept. 11.
"It will provide some relief to those who are defending our nation and they won't have to worry about their ongoing student loan payments while they are in the process of undertaking that military obligation," he said during the conference call.
Johnson believes colleges or universities that have reservists enrolled for this semester should provide a full tuition credit to students who serve in the military during the current national emergency.
"Similar action was taken during the Desert Shield and Desert Storm operations and the same needs to be done so now," Johnson said.
Early estimates from the Congressional Budget Office show that the HEROS Act has no impact on the federal budget, he added.
"These young men and women are putting their lives on the line to protect our country and we need to do everything we can to lend our support to them," Johnson said. "They have enough to worry about heading into battle, without needing to worry about whether or not their student loans have been paid."