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NATIONAL NEWS ‘mdash; With a university president who’s asking for buckets more of our money every quarter and a governor who wants to share buckets less (it was fun while it lasted, Cal Grants), the student loan has never been more important.
Thankfully, our friends at the House of Representatives seem well aware. They passed a bill on Sept. 17 that would both expand federal aid and invest some much-needed cash into higher education by revamping the student-loan system.
But even though the Senate looks prepped to pass the bill and send it up to President Obama for the final OK, Republican dissent still echoes loud and clear.
Of course, we should be skeptical to a certain extent of such sweeping legislation: Two-thirds of our nation’s student body rely on loans to graduate, so it’s important that our legislators proceed with caution. The Student Aid and Fiscal Responsibility Act of 2009 does, however, devote $3.25 billion to limiting interest rates on student loans, and puts a firm 6.8 percent cap on them as well ‘mdash; though many students would pay far under that maximum.
Funding would come from eliminating private lending, which would save an estimated $80 billion. Instead of going through banks for student loans, we’d be borrowing from the nation’s own bank account, rather than from companies like Chase and Sallie Mae, who are only in it to turn a profit. Not that a business setting out to make money is an unreasonable prospect, but we can’t afford to allow indirect lenders to capitalize on students ‘mdash; especially if Uncle Sam’s extending a hand full of Benjamins our way.
The Republican argument boils down to this: Because the S.A.F.R.A. would end the Family Federal Education Loan Program of indirect lending that’s been in place since 1965 (instead, we’d be borrowing from the government itself), it will decrease competition (and thus, loosen standards) and remain full of hidden costs.
It’s an unoriginal argument. Even Rep. John Kline (R-Minnesota) of the Education and Labor Committee noted that his party’s objection to financial-aid reform is not-so-strangely similar to its opposition to health-care reform. Kline also says he sees no reason for this change.
But the truth is that the forward step could scarcely be more necessary. Students would benefit far more from noncorporate government loans than the supposedly competitive ones we’ve got now. Likewise, those supposed ‘hidden fees,’ in all their grand specificity, amount to little more than an oppositional scare tactic.
It’s convenient for politicians who aren’t in touch with students’ needs to brush them aside, but here’s the thing: Students are at their breaking point, especially in California. If the proposed 32-percent fee increases go through next year, many UC students will be forced to walk out ‘mdash; not in protest, but in resignation.
The S.A.F.R.A. couldn’t come at a better moment. If passed, the bill would revitalize the Pell Grant program with $40 billion in increased funding over the next 10 years, helping to offset the burden of rising tuition. It would increase the maximum award from the current $5,350 to $5,550 for 2010, and continue to grow to $6,900 in 2019.
The bill would also provide a $10 billion surge to community colleges, recognizing their national importance. Community-college funding has traditionally come from individual states ‘mdash; which, to say the least, has proven insufficient in California, as enrollment swells and funding shrinks.
A litt
le help from above could go a long way in reducing class size and increasing enrollment capacity. It’s a long time coming: The Guardian, in fact, was begging for such reform back in May of this year. To see it come to fruition now would signify a crucial step in the right direction toward reforming higher education.
As proposed in the House bill, another $8 billion would be directed to early-childhood programs, and we’d still have $10 billion to give back to the Treasury. The change would even simplify the Free Application for Federal Student Aid ‘mdash; meaning you may get to keep your great-great-grandma’s maiden name to yourself after all.
Cutting out the middleman in lending would not only save billions ‘mdash; it would allow us to put those billions to better use, and make our degrees a little more affordable. Imagine that.
Readers can contact Trevor Cox at [email protected].