Today, Congressman Henry Cuellar, joined by South Texas College and University of Texas Pan American officials, announced the benefits of a college loans reduction program that makes student loan payments manageable for millions of Americans, including tens of thousands of South Texans. This includes cheaper interest rates on need-based federal loans, affordable monthly payments, and higher Pell Grant scholarships that cover the average tuition at public universities.

Starting Wednesday, July 1, interest rates on student college loans will drop from 6 to 5.6 percent. This reduction in interest rates is part of the College Cost Reduction Act of 2007 that Congress passed with Congressman Cuellar's support. The rates will continue to drop until they reach 3.4 percent in 2011. In addition, a clause in the law caps borrowers’ monthly loan payments at just 15 percent of their income (15 percent of what the borrower earns above 150 percent of the poverty level depending on the size of the family). Those who earn less than $16,000 would not have to make any monthly payments.

“These savings will allow us to keep more money in our pocketbooks. And in these challenging economic times, we all know that every penny we can save is welcomed,” said Congressman Cuellar.

The maximum amount of Pell Grant scholarship for the 2009-2010 school year will also be affected, increasing to $5,350 – more than $600 of what was allowed last year. Also, this law provides up-front tuition assistance – known as TEACH Grants – of $4,000 a year for a maximum of $16,000 to students who commit to teaching high-need areas in high-need schools for four years after graduation. College graduates who enter into pubic service careers such as teachers, public defenders and prosecutors, firefighters, nurses, non-profit workers and more, will be eligible for loan forgiveness after 10 years of qualifying public service.

“Living in South Texas, we all know that some of these high-need areas and schools are in our own backyard. What a great way to motivate our students to proceed with a career in the teaching or public service field – one of the most nobles, yet one of the most rewarding careers,” added Congressman Cuellar.

“Providing affordable and convenient access to quality higher education to the residents from Hidalgo and Starr counties has always been a priority for me.  The increased funding for Pell Grant Scholarships will be of tremendous help to the thousands of students at South Texas College who have made the heroic decision to attend college.  It provides students the opportunity to begin their career pathways towards a better quality of life for themselves and their families,” said Shirley A. Reed, President of South Texas College.

“These are extraordinary measures that will certainly go a long way in helping UTPA achieve its mission of student access and success. In fact, almost all our students will be positively impacted in one way or another,” said University of Texas Pan American Interim President Dr. Charles A. Sorber. “Consider that half the UTPA population of 17,500 is eligible for Pell Grants and one third of our students receive loans in their quest for a degree and a career.” 

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Congressman Henry Cuellar is a member of the U.S. House Homeland Security, Agriculture, and Government Oversight & Reform Committees in the 111th Congress. Accessibility to constituents, education, health care, economic development, and national security are his priorities. Congressman Cuellar is also a Senior Whip and member of the Blue Dog Coalition.