Boston University students who take out loans may be shelling out more cash over longer periods of time because of higher interest rates and raised borrowing limits detailed in the federal Deficit Reduction Act of 2005.

Signed Feb. 8 by President George Bush, the act is slated to pay off $13 billion of the federal debt but would force borrowers to pay more to pay off debt.

However, not all loans would be affected.

“The good news is, the legislation made the Stafford loans a fixed percentage rate, so it will not be reset every year,” said Financial Assistance Director Christine McGuire in an email. It is very possible that student borrowers will actually pay less over the 10-years-loan repayment, if national interest rates continue to climb during those years.”

Because the government will be putting more financial pressure on students, colleges’ financial aid offices will have to take students’ escalated monetary needs into consideration, according to School of Management finance and economics professor Bill Samuelson.

“Colleges are aware of students’ financial needs,” he said. “The government is footing less of the bill, so colleges will be more generous and offer more scholarship money and loans. It will not balance out, but it will be a partial offset.”

However, according to McGuire, BU will maintain its current financial aid policies.

Samuelson said he doubts the higher costs of escalated interest rates would keep students out of college, but it may affect what type of school they decide to attend.

Although the act may not influence potential students’ decisions to attend college, the added burden of high interest rates will factor into current college students’ choices, including transferring or attending graduate school.

College of Arts and Sciences senior Pat Shaughnessy, who received financial aid throughout his college career, said he believes the act is a negative change.

“It’s my last year, so it doesn’t concern me personally, but as a larger issue it concerns me,” he said.

Students who could be affected said they were worried about the impact of the new act. College of Engineering sophomore Tatiana Poveda said she was not pleased with the effects the new act would have on her financial situation.

“I don’t think it benefits me,” she said.