A sobering reminder for the first day of 2006: College students, having paid escalating tuition in recent years, will pay even more for their education beginning in July, when higher interest rates on student loans take effect.

To cut federal spending, Congress has approved changes in the federal student loan program that will save the government $12.7 billion over five years.

Student loans will become more expensive because:

* interest rates on student loans will be locked in at 6.8 percent, a jump from variable interest rates now as low as 4.7 percent.

* interest rates on loans that parents take out to help pay for their children's undergraduate education will go from 6.1 percent to a fixed rate of 8.5 percent.

Student groups complained that the government is making college loans more expensive, while cutting taxes for the rich.

"I think it is a very sad day when Congress has to pay for tax breaks for the wealthy by increasing fees and interest rates for students," said Eileen O'Leary, director of student aid at Stonehill College in Easton, Mass. O'Leary is past chair of the National Direct Student Loan Coalition, which represents about 1,100 colleges and universities participating in the federal direct loan program.

Able to borrow more

But there are also some benefits in the new loan program, O'Leary said, including increases in the amount that freshmen and sophomores may borrow.

The current limit is $2,625 for freshmen and $3,500 for sophomores; the new law would raise the ceiling to $3,500 and $4,500, respectively. During subsequent years, students could borrow $5,500, the same as the current amount. The total limit students may borrow over the course of their undergraduate studies will remain at $23,000.

The borrowing limits for graduate students will also increase from $10,000 to $12,000 a year.

These loan increases may come as a much-needed relief for students whose college costs have been increasing dramatically in recent years.

The College Board, a not-for-profit association that studies trends in higher education, reports that the average price of attending a public, four-year university has soared 28 percent in five years.

The average total cost of tuition, fees, room and board was $9,442 for the 2000-2001 school year. This year, the average cost adjusted for inflation is $12,127.

The average costs of attending a private, four-year university have climbed 17 percent over the same time period, from $24,883 a year to $29,026.

The U.S. Student Association, the largest student group in the United States, has protested that the loan changes will cost students thousands of dollars more over the life of their loans.

More than 60 percent of students who graduated with bachelor's degrees in 2004 left school with some federal loan debt, according to the American Council on Education, a Washington-based organization that focuses on higher education.

The median amount students at public institutions borrowed was $14,671, and the graduates from private schools left with $17,125, according to the American Council on Education.