The U.S. House of Representatives passed legislation last week to cut interest rates on student loans in half over the next five years.

The College Student Relief Act of 2007, also known as HR 5 and sponsored by George Miller (D-Calif.) and 209 others as a part of the Democrats' first 100 hours agenda, will gradually lower interest rates on federally subsidized Stafford loans from 6.8 to 3.4 percent. These loans are offered to low- and middle-income undergraduate college students and are free of interest payments until six months after leaving college.

The bill currently awaits Senate and presidential approval.

According to the Center for American Progress, college students borrowed $67 billion in federal and federally subsidized loans, and almost 40 percent of graduates from private institutions have amounts of debt that would become unmanageable at the salaries of starting teachers.

"I'm a student here who has a lot of loan debt, and I think it's great that they're looking to decrease the amount of loan debt that college students have," said Diana Lawless, director of membership for the Columbia University College Republicans. Loans have a big impact on students, she said, and indebtedness is a factor in planning post-college life.

Though all Democrats and 124 Republicans voted for the bill, which passed 356 to 71, some concerns were raised about the Democrats' "pay-as-you-go" policy, which requires that federal spending be balanced. This means that the funding for decreased interest rates could cause cuts elsewhere in the national budget.

According to Tao Tan, "when the student loan rate has been cut, the government has to make up that deficit ... either students can pay more or the government can pay more, and frankly, in my opinion, if the government pays more, the taxpayers pay more."

But according to a statement issued by Charles B. Rangel (D-Harlem) the initiative will not require higher taxes. Five of six provisions tacked onto the end of the bill would provide for small reductions in subsidies to lenders. Rangel said that if the whole House bill is passed this year, those provisions would save enough money to fund the program.

Many see this legislation as a starting point to increase accessibility to higher education.

"Cutting interest rates on student loans is only the first step in helping students and families deal with these rising costs of attending college," Rangel said in the statement.

Ellen Smith, Columbia's Director of Government Relations, called HR 5 "terrific" but added an increase in federally issued Pell Grants, which go to low-income students and do not need to be repaid, would be even better.

University of Wisconsin-Milwaukee student Ted Schaar thinks that it’s a start, but would like to see more federal funding for different grants as opposed to relief for existing ones.

“I guess I’d like to see more one to get people into school now, because the existing payments aren’t that hard to pay off once you find a job.”

A report published by the U.S. Public Interest Research Group found that if the House bill is passed into law, students with Stafford loans entering college in 2011 will save on average $4,420. Additionally, congressional statistics predict that the bill will save those 243,396 students in New York who currently get federally subsidized loans $2,360 each over the life of their loan.

HR 5 will continue to the Senate, where a larger legislative package including Pell Grant increases is expected to be discussed. The bill would be passed into law after President Bush's approval, but according to a statement from the White House, "Student debt loads have soared in recent years, and it is not clear that encouraging more loans is a wise course. Instead, the Administration would support efforts to direct savings to additional grant support for low-income students."

Tyler Casey of the Post staff contributed to this report.

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