ISSUE: Federal aid for college students

OUR VIEW: Legislation boosts chances of more getting college education

Annual increases in the cost of higher education are cutting deeply into Americans' pocketbooks. A majority of students are being left with post-graduate debt they carry for years. The situation grows more dire.

The U.S. Congress wants to change that. This past week, the U.S. House passed the College Cost Reduction Act of 2007.

S.C. Congressman John Spratt calls the bill "the largest single investment in college financial aid since the GI Bill, and one of the best decisions we can make.'' We agree.

The College Cost Reduction Act was provided for in the Budget Resolution for 2008, which Spratt, as Budget Committee chairman, prepared.

The legislation would boost college financial aid by about $18 billion over the next five years. It pays for itself by reducing federal subsidies paid to lenders in the college loan industry by about $19 billion, thus reducing the federal budget deficit by more than $1 billion. The payments to lenders are designed to guarantee banks a profit for being in the student loan business.

The bill would increase the maximum value of the Pell Grant scholarship by $500 over the next five years. The changes, in combination with other Pell grant increases that Congress has passed or proposed this year, will boost the maximum Pell Grant to $4,900 in 2008 and to $5,200 in 2011 -- up from the $4,050 where it had been frozen from 2003 through 2006.

The increase would help about 6 million low- and middle-income students afford college. Spratt noted that more than 87,000 students in South Carolina would benefit from a $500 increase in the maximum Pell Grant.

As important is a reduction in interest rates on college loans from 6.8 percent to 3.4 percent in equal steps over the next five years. This would eventually save the typical borrower -- with $13,800 in federal student loans -- $4,400 over the life of the loan. Almost 7 million students take out need-based loans each year.

In addition, the bill would keep students from incurring unmanageable amounts of federal debt by requiring them to spend no more than 15 percent of their yearly discretionary income on loan repayments, and by allowing borrowers in economic hardship to have their loans forgiven after 20 years.

House Majority Whip James Clyburn praised the legislation as an investment in the future of the country and its children. At the same time, he criticized the Bush administration for lack of support and a threatened veto.

But the legislation stands a good chance. The College Cost Reduction Act is part of a must-pass bill needed to meet spending targets in the federal budget. By linking the student assistance to the budget legislation, Democrats are ensuring that the student loan legislation can't be held up by a minority of Republicans in the Senate.

"A college education should be as accessible as high school, and passage of this bill makes that more likely," Spratt said. "It will make a big difference for the millions of students who depend on college student loans and Pell Grants."

Without it, college will continue to become out of reach for more and more students.

You must be logged in to comment.