Last Thursday, the House of Representatives passed the Student Aid and Fiscal Responsibility Act introduced by George Miller (D-CA). According to the website for the House Committee on Education and Labor, which Miller chairs, the act will invest $40 billion into Federal Pell grants—bumping the maximum award from $5,500 to $6,900 by 2019—and will save money by eliminating private lenders from the financial aid market.
“It is an important thing to realize that this is profound and historic legislation. It is the single biggest increase in financial aid ever,” Rich Williams, the Higher Education Associate for the U.S Public Interest Research Group, said.
Most vitally, this bill will retool the federal student loan system. Right now, taxpayers subsidize student loans made by private moneylenders, who are subject to the rise and fall of the market. If the bill passes the Senate, all federal lending will come from the Direct Loan program, in which the federal government lends directly to the student and cuts out the unnecessary middleman. By overhauling this over-complicated system, the government stands to save $87 billion, according to the Congressional Budget Office. Around 10 percent of that money will go toward reducing the government’s tremendous deficit, but the rest will be allotted to financial aid for students.
This amounts to the largest investment in financial aid since the GI Bill, coming just in time. Families across the country struggle to pay for a higher education system that gets pricier every day. Young people face the devastating choice between sacrificing college and dooming themselves to a lifetime of lower wages than their collegiate peers, or saddling themselves with enormous debt just as they enter the workforce.
The bill also devotes funds to historically black colleges and community colleges, and provides loan forgiveness to members of the armed forces who are called up during an academic year. Thousands of students currently resort to private loans to pay for college, sometimes without thinking of safer and more forgiving federal options. The private route is perilous: private interest rates are variable and often highest for those in the worst position to afford them.
It is essential that the Senate passes this bill. As Hoyas who claim to strive for a diverse community, we must lend our support to initiatives like this, which are crucial to enabling people from every background to come here.
