News Briefs

College loans under the knife

Getting a loan for college could become more harrowing — and expensive — if Congress passes a bill that would increase interest rates and implement new fees for borrowers.

Higher education is among several programs on the guillotine as part of the Reconciliation Bill, a measure to decrease health, social services, and education spending while proffering $50-70 billion tax cuts to wealthy Americans.

(To read how the proposed legislation affects the food-stamp program, see related story, page 31.)

According to U.S. House Representative Charlie Gonzalez (D-San Antonio), who held a conference call with local college students, the bill could cost borrowers $7.8 billion. After including new fees and higher interest rates of 8 percent, a $17,500 student loan would total $23,000.

New fees include a mandated 1 percent “insurance fee” on a loan, while the origination fees have doubled. A $5,500 student loan used to carry a $165 origination fee, basically a cost assessed by the lender when the borrower takes out the loan; under the bill, it would cost $330.

Students who want to consolidate several student loans to lower the payments would also be penalized 1 percent of the borrowed amount.

The House version of the bill passed 217-215; no Democrats voted for it. The bill has gone to conference committee for the House and Senate to agree on final language before it goes to the full Congress.

Congress is on Thanksgiving break until December 4, when it is expected to begin hammering out the details of the bill.

“All funding cuts are on the backs of those who need assistance from the government,” Gonzalez said, calling the tax cuts “preferential treatment for the highest income earners in the U.S.”

“We’re talking about government investment in health and education,” he added. “And a student loan is being paid back.”

The surcharges and interest rates also hurt prospective and current students in that tuition and fees at a four-year public college or university have increased an average of 7 percent over last year.

The Current contacted U.S. Representative Henry Bonilla (R-San Antonio) and U.S. Senator John Cornyn for comment, but did not receive a response by deadline.

The legislation could compel college-age voters to go to the polls in the 2006 mid-term elections. The Census Bureau recently reported that 47 percent of eligible voters ages 18-24 turned out for the 2004 election, up from 36 percent in 2000. By comparison, three-fourths of eligible voters ages 55-74 voted in last year’s election.

TCEQ news

The long-awaited administrative hearing about City Public Service Energy’s proposed new coal-fired power plant is scheduled for Monday, December 5, at 9 a.m., at the State Office of Administrative Hearings, 15th and Guadalupe streets, in Austin.

Opponents have fought the 750-megawatt plant for more than two years, citing concerns over mercury, sulfur dioxide, particulate matter, and other pollutants emitted from fossil fuel-burning plants.

After the hearing, which will be conducted similarly to a trial with lawyers arguing both sides, the adminstrative law judge will make a recommendation to the commissioners of the Texas Commission on Environmental Quality. The commissioners can consider the judge’s recommendation, but are not bound by it.

TCEQ is responsible for approving or denying a permit for CPS to operate its fourth coal-fired plant at Calaveras Lake. If CPS receives its permit, the utility plans to have the plant operating by 2009.

TCEQ is still pursuing the October 2004 fish kill at Leon Creek near Kelly Air Force Base `see Briefs, September 29-October 5, 2005`. The state has levied a $10,000 fine against the Air Force for violating the Clean Water Act, but the Defense Department is claiming immunity under the act’s national-security provisions.

However, the Defense Department may have to pay the fine if the TCEQ is to grant its request to modify a compliance plan for the Kelly cleanup. The plan includes removing a recovery well and groundwater collection trench, and the closure of an area over previously contaminated groundwater.

According to a letter from the TCEQ to the Air Force dated October 19, “staff will determine whether the Air Force ... has paid fees and penalties. If you have any delinquent fees or penalties, this may result in a recommendation to return your application or deny your permit.”

By Lisa Sorg


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