With a series of victories in the last midterm elections, the Democrats now have a voting majority in both the U.S. House of Representatives and Senate – and a chance to change many of the laws that the Republicans have pushed through in their last 12 years of Congressional control. One important piece of legislation that the Democrats can overhaul is the Higher Education Act; circumstances have changed since the last major revision of the legislation, and the Democrats must react accordingly.
The Higher Education Act, enacted in 1965 as a part of Lyndon B. Johnson’s “”Great Society”” program, helps low-income students by providing federal funding for loans, grants and scholarships. Congress must periodically reauthorize the act, often making changes. Since President George W. Bush took office, the Republicans failed to raise the maximum Pell Grant amount significantly as promised. Instead, in February 2002 the Republicans fixed student-loan interest rates at 6.8 percent for new loans taken out after July 2006. The Higher Education Act is up for reauthorization this December, but the Republicans currently in power are likely to leave it on the back burner so the Democrats have to deal with the reauthorization. Should they get this opportunity, Democrats in both houses have several issues to tackle: the Pell Grant caps, interest rates on student loans and tax breaks for college students.
One of the main points that the Democrats have been sure to mention to media outlets is their proposal to increase the maximum amount of money that a student can receive from a Pell Grant, which would be the first such increase in five years. The current limit on the Pell Grant is $4,050; the Democrats have been aiming to increase that limit by as much as $1,000, which is projected to cost $17.3 billion. While the purpose of this boost is to help counteract the rising costs of tuition, such as the recent fee hikes in the UC system, there are better ways than this to spend $17.3 billion on Pell Grants. While the proposed addition to the Pell Grant is a step in the right direction, it isn’t nearly the boon it could be, since many people do not receive the maximum amount.
A more meaningful plan would increase the number of people receiving Pell Grants without increasing the upper limit, or simply increasing the amount of funding for the grant program, earmarking the added cash for the neediest students. Both of these alternatives would be far more beneficial to needy students. The current proposed change is more politically expedient for the Democrats rather than truly beneficial for students. Raising the maximum amount students can receive with a Pell Grant provides the Democrats with a nice, round number to show off as an example of how they are helping students. The Democrats could also simply reduce the number of Pell Grant recipients in order to pay for raising the limit on the grant.
Another ace up the Democrats’ sleeve is their plan to halve interest rates on student loans, from 6.8 percent to 3.4 percent, a plan projected to cost $18 billion. While this would reduce the burden on college graduates who need to pay back their loans in the future, it does not help prospective college students pay for college in the present. The money spent reducing interest rates could be better spent increasing the sizes of the loans given to students, so that they can afford the education they need to find jobs that will pay enough to pay back the loans at the current interest rates. Another plan would be to spend the money on giving loans to more students, so that more people who apply for student loans can receive them. In both cases, the money spent toward relieving interest rates for those already graduated from college can be better spent on those who have yet to receive a college education.
Other parts of the Democratic plan include giving college students a $4,000 tax credit. This is largely meaningless, as many college students do not need to pay taxes, and many of those who do are not in need of financial aid in the first place. While most people enjoy tax breaks, there is the question of whether they actually need a tax cut to afford a college education. Instead of a blanket tax break, the government should focus on providing aid for those who actually need the benefits from the proposed tax cut, either through cutting taxes on an individual basis or using the funds to bolster a different program.
Part of the legislation that Democrats should protect is the section prohibiting people convicted of drug-related crimes from receiving federal aid. The purpose of financial aid is to help those who wish to get an education and have shown their dedication to learning. Using drugs is a clear indication that education is not the top priority of the person in question, and the government should not waste its money or time disadvantaging those who would actually benefit from a college education.
The Democrats have many things to accomplish once they take office in January. Financial aid reform for college students is one of the things on their list, and hopefully the Democrats get it right.
