(U-WIRE) PITTSBURGH – Congress passed legislation approving an extensive overhaul of federal student loan programs Friday.
The bill will dramatically reduce subsidies to lenders and put more money into grants for needy students.
Finally, some good news from Congress. It’s about time we stopped over-subsidizing banks. Money should be given straight to the students where it is needed the most.
Among other things, this bill will increase the maximum Pell Grant. By reducing subsidies to lenders by about $20 billion, Congress will be able to raise the annual Pell Grant from $4,310 to $5,400 per year over the next five years.
Furthermore, the bill will offer pardons on student loans to college graduates who work for 10 years or more in public service professions like teaching.
This is a great idea.
Students who work in such professions usually end up paying back their college loans for the rest of their lives, but this will ease the financial burden immensely. Now, students will probably have a greater incentive to go into those public service professions.
But, like every piece of legislation, this bill was met with some opposition.
Lenders claim that the reductions would push some of them out of business and decrease competition, ultimately reducing lending services to students.
However, we can’t help but think that lenders are just worried about their own welfare.
Investigations have shown that lenders have, in the past, gone so far as to give free travel, gifts and monetary incentives to colleges so that colleges would be inclined to guide students in their direction.
A few Republicans have also opposed the bill.
According to the New York Times, Rep. John A. Boehner of Ohio, former chairman of the Education Committee, said that the subsidy cuts “will cripple the private sector loan program.”
Other House Republicans criticized parts of the bill for being similar to socialism.
However, it’s important to keep in mind that, according to the New York Times, many of these Republicans had received large campaign contributions from lenders in the past. And people wonder why so many college students are Democrats.
Economically, the Republicans claim, the bill would prove irresponsible in the future.
But we disagree.
It is, in fact, the old system that has already proven itself unreliable for students and was in need of major changes.
As some Republicans complain about the bill, Democrats in Congress were quick to take full credit for it.
Democratic Rep. George Miller of California told the New York Times that while Republicans took billions of dollars away from federal student aid programs last year, “we took $11.39 billion and put it back into Pell Grants. That’s the difference that an election makes.”
Maybe so, but we’re not ready to bow down at their feet just yet.
True, they’ve managed to do something positive, but it’s one of the few positive things they’ve done since they took control of Congress. We hoped for a lot more.
At the same time, however, their efforts should not go completely unappreciated.
This bill was largely a Democratic accomplishment, and they deserve credit for uniting to finally change student aid programs for the better.