Effective on July 1, 2006, it will be more difficult for U.S. students to both become eligible for and borrow federally subsidized student loans, due to legislation signed by President Bush in February 2006. Known as the Budget-Deficit Reduction Bill, it wipes out $12 billion from the federal student loan program. The interest rates will climb to a fixed rate of 6.8 % for a student applying for a federal loan, referred to as the Stafford Loan program, with a capped rate of 8.5% for parents applying on behalf of their child, known as PLUS loans, also subject to additional variable rates. Many parents are considering home equity loans as an alternative, which provide far lower borrowing interest rates.

But with college tuition rates rising each year sometimes more than double the rate of inflation, it is becoming more and more impossible for the middle class to afford a college education. With the federal loan limit for years now remaining at $20,000.00 per school year, it requires many to apply for private bank loans in addition to the federal loan. Many students take as many as seven years to complete an undergraduate degree as they must work full-time at low-paying jobs, in order to afford tuition and living expenses, thus delaying their ascendance into the permanent work force.

According to the Department of Education, as many as 400,000 U.S. students each year forego a higher education entirely, dissuaded by tuition costs and fear of the inability to repay college loans. In the last several years, due to declining interest rates, students were able to consolidate their student loans in order to lower the rates on previous accruing loans. With the new legislation, the fixed rate will preclude them from doing so in the future, regardless of a decline again in interest rates.

The higher education dilemma in the U.S. is rather complex and multi-faceted, however, and universities have already begun to look to other resources in order to fill their coffers by going abroad. That brings us to the present immigration bill making its way through the U.S. Senate which is a far more liberal version than the U.S. House of Representatives