By Susan Tallant/managing editor
   The price tag of a college degree recently went up when President Bush signed a new budget bill raising the interest rates on student loans.
   The Deficit Reduction Act of 2005 will increase interest rates on Stafford loans from a variable rate currently at 4.7 percent to a fixed 6.8 percent.
   “ The cost of a degree is up, but look at the returns,” Bill Elliot, vice president for enrollment at Carnegie Mellon University, said in a recent U.S News and World Report article written by Kim Clark. “How can you afford not to get one?”
   Elliot said students and parents will simply have to bear the cost, but the payoff is higher salaries and better jobs.
   “ Every July 1, the interest rate changed anyway, and it was always a variable interest rate that would never go up over 8.25 percent,” Trina Smith-Patterson, NW Campus director of financial aid, said.
   The difference with the new proposal is that the rate will stay at a fixed 6.8 percent.
   Smith-Patterson said each year, around the time the new interest rate is about to change, students usually get consolidation offers in the mail. Some offers come from unknown banks, so students should be cautious.
   “ Weigh the offers very carefully because you need to make sure they are from a bank or legitimate source such as Sallie Mae, Nellie Mae or some other company who has been around for a while,” she said.
   Some companies will contact students with a loan consolidation offer over the phone.
   “ Students should never give out information over the phone,” she said. “Request the offer to be mailed in writing so you can research it.”
   Smith-Patterson said students should also research whether the company making the offer can keep the interest at the rate it proposed after the change in legislation.
   “ I don’t know if a company can keep your rate lower than the 6.8 percent after the new law takes effect; that is something I will have to research,” she said.
   The best thing students can do to help themselves is to limit the amount of loan money they borrow, Smith-Patterson said.
   “ We try to limit loan debt as much as possible to help [students] in the future when they are repaying the loans,” she said.
   Finding alternatives like scholarships also can help reduce loan debt, Smith-Patterson said.
   “ It is helpful to keep the debt amount down at the community college level, especially if the student plans to transfer to a four-year university,” she said.
   The best time for students to begin the application process for fall semester loans is at the beginning of the year, but no longer than three months prior to the start of the semester.
   Smith-Patterson said student loan applications are generally available in January. Therefore, students can go online Jan. 2 and begin the process.
   “ The earlier students apply for financial aid, the fewer problems they will have getting the money on time.”
The priority deadline is April 15.
   “ If the student can meet that deadline, we can have everything processed before tuition and fees are due,” she said.
   Many available programs distribute funds on a first-come, first-served basis.
   “ Students who do not apply in January, February or March might get put on a waiting list until more funds become available,” she said.
   Once students become eligible, they must also stay eligible, Smith-Patterson said.
   “ It is almost easier to become eligible than to stay eligible,” she said.
   Students can read about eligibility requirements, such as the Satisfactory Progress Policy, online or in the student handbook. A copy of the policy is also mailed to students along with the student’s award letter.
   “ Just like you are educating yourself about your classes, educate yourself about your aid,” she said.
Smith-Patterson said students should monitor their academic progress.
   “ If you are experiencing a problem in class, talk with your instructor or get tutoring help,” she said. “We want to keep you eligible for financial aid.”
   The Deficit Reduction Act of 2005 proposes more than just interest rate changes. It includes changes concerning in-school loan consolidation, spousal loan consolidation, new loan limits, new grant amounts and a change in the expected family contribution.
   “ The Deficit Reduction Act makes important improvements to federal student loan programs. The bill cuts excess government subsidies to lenders and makes other reforms that will help us reduce overall student loan costs by about $22 billion,” President Bush said Feb. 8 prior to signing the bill.
   “ With that money, we will save taxpayers $12 billion because we intend to increase student aid by 10 additional billion dollars,” he said.
   Bush said the new program is more efficient for taxpayers and will allow students to get money needed for school.
   For help with reading loan offers or questions about new rates, call or drop by the financial aid office on any campus.
   Information about scholarships, student loans and financial aid is also available on the TCC Web site: www.tccd.edu.