Washington, D.C. ? Alarmed by a rapid rise in student debt, Democratic leaders in the coming Congress are promising to lower payments on new college loans by cutting the interest rate in half.

During the first 100 hours of the 110th Congress, Democrats plan on reducing the interest rate from 6.8 percent to 3.4 percent. They contend that would help the typical undergraduate student borrower – who graduates with $17,500 in debt – pocket $5,600.

Across the nation, debt loads are rising for students, the highest being in New Hampshire, where the class of 2005 graduated with an average debt of $22,793, according to The Project on Student Debt.

While the plan to lower interest rates has broad political appeal, it would cost an estimated $18 billion over five years and is likely to test Congress’ new commitment to hold down spending as a way to lower deficits.

Many Democrats are promising to back pay-as-you-go budget rules that would force members of Congress to identify tax increases or spending cuts to fund any new spending.

Some Democrats, including Sen. Edward Kennedy, D-Mass., the incoming chairman of the Senate Education Committee, say the government could save money by making college loans directly, relying less on private lenders.

The plan to lower interest rates is part of a broader Democratic effort to make it easier for students and parents to pay tuition by increasing Pell Grants from $4,050 to $5,100 per year and expanding tax credits, among other things.

Rep. George Miller, D-Calif., the incoming chairman of the House education committee, said Congress must help middle-income Americans who are being squeezed by declining paychecks and rising bills for college tuition, housing, health care and energy.

The plan to increase Pell Grants is drawing support from both sides of the aisle.

A group of lawmakers recently sent a letter to Rob Portman, director of the Office of Management and Budget, asking for an increase of the maximum grant.

Student Debt for Kansas

¢ Overall average debt: $16,753

¢ Public universities: $16,448

¢ Private nonprofit colleges: $18,010

Source: Project on Student Debt, projectonstudentdebt.org